Fairfax (FXJ) and Domain (DHG) demerger details

On November 2nd Fairfax Media Limited shareholders held a vote at the company’s AGM in Sydney on the separation of the Domain business unit from the rest of the Fairfax business - that vote was successful - with the demerger occurring on the 16th of November on the ASX.

Details of the Fairfax - Domain ASX demerger

• On the 16th of November Domain Holdings Australia will commence trading on the ASX under the ticker code ‘DHG’, initially on a deferred settlement basis
• Eligible Fairfax Shareholders will receive one DHG share for every ten FXJ shares owned
• Fairfax Media Limited (FXJ) will retain a 60% holding in Domain Holdings Australia (retaining control of DHG), with the remaining 40% held by eligible shareholders
• Normal trading of ASX:DHG shares is expected to commence on the 23rd November

Background on the Domain - Fairfax Demerger

Fairfax Media Limited is a 186 year old business, with interests across print, online media, radio and streaming video services across both Australia and New Zealand, with a claimed reach of 70% of Australians and 90% of New Zealanders.

Fairfax Chairman Nick Falloon, describes Domain as “A real estate and technology services business, offering services across digital and print platforms.”

The Domain business emerged within Fairfax as a dominant player (alongside REA Group) in the online real estate advertising space in Australia, riding the nation’s prolonged ‘boom’ in property prices and the shift from real estate print advertising in newspapers towards an online marketplace model.

Fairfax’s publishing businesses has seen declining revenues for some time, owing to the shift in consumer preferences from print to online media, which has impacted advertising revenues for the business, with the pre-tax cash flow of Fairfax (excluding Domain) half what it was three years ago.

Domain on the other hand, has tripled pre tax cash flow over the same period and separating this business is seen by the Fairfax board as providing additional flexibility for both businesses, which is argued, will maximise shareholder value.

Handling the FXJ - DHG demerger in Sharesight

Read the Sharesight help page on how to handle the Fairfax Media Limited (FXJ) - Domain Holdings Australia (DHG) demerger in your Sharesight portfolio.

For information on how to handle the CGT implications of demergers if you’re in Australia, visit here on the ATO website.

If you’re not already tracking your shares with Sharesight, now’s the time -- Sharesight makes managing your share portfolio easy -- sign up today.

FURTHER READING

• Help -- Mergers
• Help -- How to handle the Fairfax Domain corporate action in Sharesight
• Blog -- Corporate actions and your investment performance
• Blog -- Why I use Sharesight to track my portfolio