In his first public comments since last week,Bruce Gordon,the owner of regional TV network WIN Corporation and Nine's biggest shareholder with a 15 per cent stake,said he supported the merger,which would create one of Australia's largest media companies.
Bruce Gordon:Nine's biggest shareholderRob Homer
"It looks like a sensible deal all around. I like it,"he said in a short statement to Fairfax Media.
The deal would unite Nine's free-to-air network with Fairfax's newspaper mastheads includingThe Sydney Morning Herald andThe Age,its interests in radio stations including Sydney's 2GB and 3AW,a 60 per cent stake in Domain,and video streaming platform Stan. Fairfax is the publisher of this website.
Mr Gordon,who is notoriously private and has built his media empire through a series of canny maneuvres,is often viewed as an unpredictable dealmaker.
Fairfax and Nine have will merge together as one company covering television,online video streaming,print,digital and real estate advertising.
He surprised many media executives in September by purchasing a 15 per cent stake in regional broadcaster Prime Media at a time when the financial future of regional television is thought to be bleak.
While Nine shareholders do not get to vote on the deal,Mr Gordon's comments are a boost to the management teams and boards of both companies,who have unanimously endorsed the tie-up.
Earlier this week,two key shareholders in Fairfax expressed doubts about the deal,saying Nine's bid was too low. The deal has also been criticised by unions and figures such as The merger was made possible by changes to long-existing cross-media ownership laws secured by the Turnbull government last year.
Under the terms of the deal,Fairfax shareholders will receive 0.3627 Nine shares and 2.5¢ in cash for each Fairfax share they hold. This implied a 22 per cent premium to Fairfax's share price the day before the deal was announced,or a price of 94¢.
Eroding premium
But steeper than expected declines in Nine's share price since have eroded the premium Fairfax shareholders were due to receive,posing a potential threat to the deal.
Nine's shares traded 2.9 per cent higher at $2.30 as of 12:56 pm in Sydney. Fairfax shares climbed 4 per cent to 84¢.
On Tuesday,Mr Gordon was believed to have increased his economic interest in Nine,a move that may be designed to ensure he maintains influence at the bigger company if the merger goes ahead.
In addition to his 15 per cent outright shareholding in Nine,the Bermuda-based billionaire has a further indirect interest in Nine of about 5 per cent through equity swaps,believed to be through broker Deutsche Bank.