No plans for Domain float by Fairfax Media as Catalano drives growth
Fairfax Media chief executive Greg Hywood has told staff that Fairfax had ''no plans'' to float Domain, its second-ranked property portal.
It followed a News Ltd report in The Australian yesterday saying that rival Fairfax was priming the Domain site for sale. It lead to shares in Fairfax rising to a 27-month high.
The Australian reported that Domain was ''considering joining a heady rush for floats with a $500 million listing of Domain on the local stockmarket in early 2015''.
Greg Hywood's ensuing email advised that Fairfax had ''no plans'' to float Domain which dampened growing expectations that initially arose after Fairfax Media put Domain into a separate business unit in April 2013.
''We appointed Antony Catalano as CEO because we wanted to accelerate the growth of Domain. The business is gaining a strong competitive foothold,'' the Greg Hywood email reportedly said.
Domain reported a 33 percent rise in online revenue, and 50 percent growth in digital earnings before interest, taxation, depreciation and amortisation in the six months to December 31.
Fairfax Media upped the Domain value today reporting Macquarie valued Domain at $974 million, the bulk derived from its digital operations. Fairfax's dating site RSVP was valued at $72 million.
It suggested its radio assets were worth $145 million.
There had been renewed talk of a $200 million joint venture between Macquarie Radio Network and Fairfax Radio's stations, but it's not likely to happen.
Macquarie Radio major shareholder John Singleton says he will never embark on a joint venture with the Fairfax Media chairman Roger Corbett and chief executive Greg Hywood.
The tirade against Fairfax was published in today's The Australian.
"They (Fairfax) are selling all their future assets to prop up their dead assets," with Singleton saying there had been disastrous leadership from the Fairfax board.
"Here we have what was a No. 2 media company in Australia and we've watched it disappear before our very eyes," he told the paper's new media editor Sharri Markson and the veteran columnist Mark Day.
"We've had to put up with Fred Hilmer, Conrad Black -- and just when you think you can't make matters worse, you get Roger Corbett.
"He goes in and he hires Greg Hywood. Where from? From Tourism Victoria. And does he make a decision? No. He hires management consultants."
Singleton attacked Fairfax's business operations, saying the only decent asset they had was Domain.
"There are third-rate wankers in charge of destroying Fairfax," Singleton said.
"They will both (Corbett and Hywood) be gone in a year."
The initial article in The Australian suggested Kerry Stokes’ Seven West Media proposed buying half of Domain in late 2012, but the deal fell down amid frustration at the pace of talks and resistance from some Fairfax board members.
News holds 62 per cent of REA, which owns websites including realestate.com.au, which is now capitalised at $6.5 billion.
The News Ltd article headlined the Fairfax float as a $500 million offering.
News Ltd quoted Fairfax sources as saying the Domain business was internally valued at $350 million in mid-2013.
Morgan Stanley attached an equity value of between $232 million and $464 million when it ran the numbers in late 2013.
The agitator Fairfax shareholder Simon Marais was quoted yesterday by The Australian as urging Fairfax to focus on building Domain’s revenues for two more years before a float or sale.
