Antony Catalano reveals plans for $800m Fairfax asset sales

Antony Catalano’s plans for were shared with supporters of his last-ditch legal bid to halt the company’s $4 billion merger with . Picture: Stuart McEvoy

 EXCLUSIVE

JOHN STENSHOLT

RICH LISTS EDITOR

@JohnStensholt

 11:00PM NOVEMBER 21, 2018

Fairfax Media would embark on asset sales worth more than $800 million and try to partner with Seven West Media and ANZ to focus on real estate services such as mortgages and insurance under plans drawn up by former Domain boss Antony Catalano.

Details of Mr Catalano’s plans for Fairfax were shared with supporters of his last-ditch legal bid to halt Fairfax’s $4 billion merger with Nine Entertainment ahead of the Federal Court potentially giving the green light to the deal next Tuesday.

Mr Catalano’s plan would include selling Fairfax’s Macquarie Radio stake for $180 million-$200m, streaming provider for up to $300m, offloading New Zealand assets and Australian rural assets in a series of sales that could reap more than $200m, and disposing of some newspaper mastheads, forecasting service Weatherzone and other holdings such as property.

The plan would leave Fairfax with its metropolitan media assets such as and Morning Herald and its 60 per cent of the now separately listed Domain.

At that point Fairfax would attempt to strike partnerships with the likes of Seven and ANZ to drive the Domain business, Mr Catalano has told confidants in messages seen by The Australian, with a focus on real estate- related services like mortgages and insurance rather than it being simply a classifieds business.

Mr Catalano, who sensationally quit the online property listing company in January, would return to Fairfax to oversee the Domain strategy.

The Australian revealed on Monday that Mr Catalano was pursuing ANZ as a minority investor should his break-up plan for Fairfax come to fruition.

Though his legal bid to scupper the merger is considered a long shot, the revelations come as billionaire investor and Fairfax shareholder Alex Waislitz backed Mr Catalano’s plan at the annual general meetings of his Thorney Opportunities and Thorney Technologies listed investment companies yesterday.

“If the recently announced plan by former Domain chief Antony Catalano to challenge the merger can result in a better deal for all Fairfax shareholders then I would be supportive of it,” Mr Waislitz told the meeting.

“It appears the premise for Mr Catalano’s challenge is that the sum of the parts valuation of the Fairfax assets is in the range of 85c to $1. Mr Catalano himself is a proven value creator and this valuation range is supported not only by Mr Catalano’s own analysis, but by the independent expert’s valuation, published research by equity analysts, a previous indicative bid by private equity, as well as it being my own view.”

Mr Catalano is trying to drum up investor and legal support, having made an 11th-hour appeal to block or delay Monday’s vote by Fairfax shareholders on the Nine deal via a letter to Fairfax chairman Nick Falloon in which he proposed “acquiring up to 19.9 per cent of Fairfax shares at a price superior to the intrinsic market-to-market value of (Nine’s proposal) of up to 65c a share”.

The Fairfax board considered the letter but Mr Falloon said it did not contain “an actual proposal that could be considered” as an alternative to its deal with Nine.

Almost 82 per cent of Fairfax investors then backed the bid via a shareholder vote, though Mr Catalano has claimed the 177-year-old media company’s recent share price fall meant Nine was getting a cheap deal.

Fairfax shares closed at 63c yesterday. Mr Catalano has said he believes Nine is not paying a premium for its Macquarie Radio stake or for its 60 per cent stake in Domain and half- share of Stan, jointly held with Nine.

He said Fairfax could sell its New Zealand assets for about $120m and the Australian regional titles could bring in $100m in a series of individual sales. It could also sell its Stan stake, the Fairfax events business and some other newspaper and real estate on its balance sheet.

Mr Waislitz, meanwhile, has said he is keeping his options open regarding Fairfax. He said yesterday that he had sold some Fairfax shares earlier this year when its price was higher, but could also stay in as a shareholder after the Nine deal.

Meanwhile, both he and Mr Catalano and some of Australia’s wealthiest individuals and families could be major beneficiaries of a pending funding round for the recently privatised Updater.

A provider of services to consumers moving house in the US, Updater recently delisted from the ASX with market capitalisation of about $650m in an unusual transaction backed by rich-lister shareholders Rod Jones, Mr Waislitz and the billionaire Lowy family.

Mr Catalano is also a shareholder and director of Updater. The firm’s founder and executive director David Greenberg told the Thorney meeting yesterday that Updater expected to raise private capital from US investors by the end of March next year that could cement its ‘‘unicorn’’ status.

“I would hope that we would have then reach a valuation (of $US1bn) because I think we are worth that … but that will depend on what the potential investors think,” Mr Greenberg said.