Fairfax Media Limited, in the matter of Fairfax Media Limited

Fairfax Media Limited applied to the Federal Court for an order convening a meeting of its members to consider and vote on a proposed scheme of arrangement. The scheme aims to restructure the company by transferring the Domain business to a new entity, Domain Holdings Australia (DHA), while Fairfax Media Limited retains its other businesses. The restructuring is designed to align with the Separation Principle, which ensures that DHA bears all economic risks and benefits of the Domain business, and Fairfax Media Limited retains those of its other businesses, except for its shareholding in DHA. The key steps in implementing the restructuring include agreements between Fairfax Media Limited and DHA to transfer relevant assets and liabilities, releases and indemnities, and the continued provision of certain services by Fairfax Media Limited to DHA for a transitional period. The scheme also includes a $536 million reduction in Fairfax Media Limited’s share capital, which will be applied as consideration for shares in DHA to be issued to Fairfax Media Limited’s members.

The court considered whether the proposed scheme was fair and reasonable to the members of Fairfax Media Limited and whether it complied with the requirements of the Corporations Act 2001. The court examined the terms of the scheme, the benefits and risks to Fairfax Media Limited’s members, and the fairness of the process by which the scheme would be approved. The court found that the scheme was fair and reasonable and complied with the Act. The court was satisfied that the scheme provided for a transparent and equitable distribution of benefits and risks between Fairfax Media Limited and DHA, and that the process for approving the scheme was fair and complied with legal requirements.

Pursuant to the application, the court ordered Fairfax Media Limited to convene and hold a meeting of its members to consider and vote on the proposed scheme. The meeting was to be held on 2 November 2017, with the scheme booklet approved for distribution to members. The court also authorised Mr Nicholas Falloon or, failing him, Mr James Millar, to act as Chairman of the meeting, and specified the voting rights and procedures for the meeting. The court further directed the dispatch of the scheme booklet and proxy forms to members and required the publication of a notice of hearing. The proceeding was stood over for the hearing of any application to approve the scheme. The court granted liberty to apply and ordered the immediate entry of the orders.