Updated: 11.45 am 22 Feb
Fairfax confirms spinning off Domain. Here is what we understand so far.
- On Wednesday morning the AFR (a Fairfax Media owned newspaper) confirms that its parent company was considering spinning off Domain real estate advertising business into a separate entity.
- Details of the Domain spin off have sent Fairfax shares up by 9 percent to 95 cents today after it halted trading on Tuesday.
- Fairfax plans to keep 60 to 70 percent of Domain and issue the rest of Domain’s shares to existing Fairfax shareholders, who will have to vote on the deal in which an agreement will have to be reached with the tax office.
- Fairfax executives hope that investors will value Domain more when it is a separate company because it won’t be exposed to the risk of more traditional media businesses, including newspapers.
- The potential spin-off of Domain is a move that has been speculated for some time.
- Analysts estimate Domain could have a market cap on its own of $2 billion.
- According to Business Insider, (also Fairfax owned) Domain is Fairfax’s fastest growing division.