Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/708" target="_blank" data-smartkarma-citation="entities:708:1">Nine Entertainment Co Holdings (NEC AU)</a>'s shares sharply declined (-10.32% to A$2.26) shortly after the announced deal on the 26th July, touching an intra-day low of $2.15 yesterday, implying an almost nil premium to <a href="https://www.smartkarma.com/entities/8996" target="_blank" data-smartkarma-citation="entities:8996:1">Fairfax Media (FXJ AU)</a>'s then share price, down from 21.9% at the time of the announcement. A recovery in Nine's share price to close today at $2.24 places an implied value for Fairfax of A$0.84, in line with my NAV/share, and a 3% premium to last close. 
With ~97% of the merger…

Nine Entertainment Co Holdings (NEC AU)'s shares sharply declined (-10.32% to A$2.26) shortly after the announced deal on the 26th July, touching an intra-day low of $2.15 yesterday, implying an almost nil premium to Fairfax Media (FXJ AU)'s then share price, down from 21.9% at the time of the announcement. A recovery in Nine's share price to close today at $2.24 places an implied value for Fairfax of A$0.84, in line with my NAV/share, and a 3% premium to last close. 
With ~97% of the merger…

Nine's Premium Fades, But Pricing for Fairfax Remains Full

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

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Morningstar, Inc.

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We view <a href="https://www.smartkarma.com/entities/708" target="_blank" data-smartkarma-citation="entities:708:1">Nine Entertainment Co Holdings (NEC AU)</a>'s merger proposal as a positive for shareholders of <a href="https://www.smartkarma.com/entities/8996" target="_blank" data-smartkarma-citation="entities:8996:1">Fairfax Media (FXJ AU)</a>. Based on the latest closing prices, the deal values no-moat-rated Fairfax at AUD 0.84 per share comprising 0.3627 Nine shares (at AUD 2.26) and AUD 0.025 cash. This is 20% above our AUD 0.70 fair value estimate for Fairfax, so little wonder the board will unanimously recommend the proposal to shareholders.The consideration is generous, struck on a forward EBITDA multiple of…

We view Nine Entertainment Co Holdings (NEC AU)'s merger proposal as a positive for shareholders of Fairfax Media (FXJ AU). Based on the latest closing prices, the deal values no-moat-rated Fairfax at AUD 0.84 per share comprising 0.3627 Nine shares (at AUD 2.26) and AUD 0.025 cash. This is 20% above our AUD 0.70 fair value estimate for Fairfax, so little wonder the board will unanimously recommend the proposal to shareholders.The consideration is generous, struck on a forward EBITDA multiple of…

<a href="https://www.smartkarma.com/entities/708" target="_blank" data-smartkarma-citation="entities:708:1">Nine Entertainment Co Holdings (NEC AU)</a> and <a href="https://www.smartkarma.com/entities/8996" target="_blank" data-smartkarma-citation="entities:8996:1">Fairfax Media (FXJ AU)</a> have entered into a Scheme Implementation Agreement in which the two companies will merge (albeit a Nine takeover) via a cash/scrip structure, in an A$4bn deal, creating Australia's largest integrated media player.
Fairfax shareholders will receive 0.3627 Nine shares and A$0.025/share in cash, valuing Fairfax at A$0.94/share, a 21.9% premium to last close. That places a value on Fairfax of ~8x FY19E EV/EBITDA, according to…

Nine Entertainment Co Holdings (NEC AU) and Fairfax Media (FXJ AU) have entered into a Scheme Implementation Agreement in which the two companies will merge (albeit a Nine takeover) via a cash/scrip structure, in an A$4bn deal, creating Australia's largest integrated media player.
Fairfax shareholders will receive 0.3627 Nine shares and A$0.025/share in cash, valuing Fairfax at A$0.94/share, a 21.9% premium to last close. That places a value on Fairfax of ~8x FY19E EV/EBITDA, according to…

Equity Bottom-Up

No-moat-rated <a href="https://www.smartkarma.com/entities/8996" target="_blank" data-smartkarma-citation="entities:8996:1">Fairfax Media Ltd (FXJ AU)</a> is often seen as a potential predator in the domestic media sector, in light of the recent ownership law relaxation. This is not surprising given Fairfax boasts one of the strongest balance sheets in the industry, sitting on wholly-owned entities' net cash of AUD 7 million. That is a sizable war chest with which to make a play for a TV asset, for instance, with the AUD 1 billion-plus value of its 60% shareholding in Domain a source of further ammunition.…

No-moat-rated Fairfax Media Ltd (FXJ AU) is often seen as a potential predator in the domestic media sector, in light of the recent ownership law relaxation. This is not surprising given Fairfax boasts one of the strongest balance sheets in the industry, sitting on wholly-owned entities' net cash of AUD 7 million. That is a sizable war chest with which to make a play for a TV asset, for instance, with the AUD 1 billion-plus value of its 60% shareholding in Domain a source of further ammunition.…

We raise our fair value estimate for <a href="https://www.smartkarma.com/entities/8996" target="_blank" data-smartkarma-citation="entities:8996:1">Fairfax Media Ltd (FXJ AU)</a> by 8%, or AUD 0.05 per share, to AUD 0.70, following the no-moat rated group's first post-<a href="https://www.smartkarma.com/entities/26033" target="_blank" data-smartkarma-citation="entities:26033:1">Domain Holdings Australia Ltd (DHG AU)</a> split result.AUD 0.03 of the lift stems from an upgrade to our earnings estimates, reflecting better-than-expected progress on two cost fronts. First, the 15% year-on-year lift in first-half metropolitan publishing EBIT to AUD 28 million was eye-catching, with aggressive expense management more than…

We raise our fair value estimate for Fairfax Media Ltd (FXJ AU) by 8%, or AUD 0.05 per share, to AUD 0.70, following the no-moat rated group's first post-Domain Holdings Australia Ltd (DHG AU) split result.AUD 0.03 of the lift stems from an upgrade to our earnings estimates, reflecting better-than-expected progress on two cost fronts. First, the 15% year-on-year lift in first-half metropolitan publishing EBIT to AUD 28 million was eye-catching, with aggressive expense management more than…

As Fairfax Media Steps Up Cost-Out, We Step Up FVE to AUD 0.70

Australia

Fairfax Media Limited publishes and prints newspapers, magazines and entertainment publications.  The Company also provides advertising sales in newspapers, magazines and electronic formats.  Fairfax also offers an Internet business which includes news and classifieds.

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Fairfax Media (FXJ AU)

Nine's Premium Fades, But Pricing for Fairfax Remains Full

Nine Entertainment Co Holdings (NEC AU)'s shares sharply declined (-10.32% to A$2.26) shortly after the announced deal on the 26th July, touching...

David Blennerhassett

Fairfax on Cloud Nine

We view Nine Entertainment Co Holdings (NEC AU)'s merger proposal as a positive for shareholders of Fairfax Media (FXJ AU). Based on the latest...

Morningstar, Inc.

Nine & Fairfax - Integrated Advertising

Nine Entertainment Co Holdings (NEC AU) and Fairfax Media (FXJ AU) have entered into a Scheme Implementation Agreement in which the two companies...

David Blennerhassett

Downside of Showbiz for Fairfax

No-moat-rated Fairfax Media Ltd (FXJ AU) is often seen as a potential predator in the domestic media sector, in light of the recent ownership law...

Morningstar, Inc.

As Fairfax Media Steps Up Cost-Out, We Step Up FVE to AUD 0.70

We raise our fair value estimate for Fairfax Media Ltd (FXJ AU) by 8%, or AUD 0.05 per share, to AUD 0.70, following the no-moat rated group's...

Morningstar, Inc.

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