SYDNEY, July 26 (Xinhua) -- In a shock move that has taken many observers in the Australian media landscape by surprise, two of the largest news and entertainment entities have announced a 4.2-billion-Australian dollar (3.1 billion U.S. dollars) merger plan.
Under the proposal announced on Wednesday, television network Nine Entertainment will take over the newspaper giant Fairfax Media in a deal that will see Nine's shareholders control 51.1 percent of the company with Fairfax investors holding the remaining 48.9 percent.
In what is referred to as a "scrip bid," Fairfax's board members will unanimously recommend its shareholders vote to receive 0.3627 Nine shares for each share they own, along with an additional 2.5 Australian cents (1.86 U.S. cents) per share.
In aggregate terms, this would represent a 21.9 percent premium of Fairfax's closing share price yesterday, which finished at 77 Australian cents (57 U.S. cents).
Set to make it "Australia's largest integrated media player," Nine's chief executive Hugh Marks said in statement to the Australian Securities Exchange, the "merger with Fairfax will add another dimension, creating a unique, all-platform, media business that will reach more than half of Australia each day through television, online, print and radio."
"For our shareholders, the merged business will generate an increasing percentage of its earnings from high-growth digital businesses that provide a compelling opportunity to generate both incremental value and cash flow into the future," he added.
If approved by shareholders and the Australian Competition and Consumer Commission, the merger is expected to take place before the end of 2018.
