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Nine Entertainment Co. (NEC) and Fairfax Media Limited (FXJ) Merger - December 2018

Below is information relevant to Fairfax Shareholders participating in the scheme of arrangement in relation to the merger of Nine Entertainment Co. Holdings Limited (NEC) and Fairfax Media Limited (FXJ).

  • On 7 December 2018 (Implementation Date), the scheme of arrangement in relation to the merger of Nine and Fairfax was implemented.
  • The Scheme Consideration received by a Fairfax Shareholder for each Fairfax share on the Implementation Date was the aggregate of:
    • $0.025 in cash (the Cash Consideration); and
    • 0.3627 of a New Nine Share (the Scrip Consideration).
  • The market value of New Nine Shares determined as at the Implementation Date was $1.658 per New Nine Share.  This equates to the one day cumulative volume weighted average price (VWAP) of one New Nine Share on 7 December 2018.  
  • The above market value has been determined in accordance with ATO guidelines regarding the determination of market value for scrip consideration in the event of a merger via a scheme of arrangement – click here for further information.
  • Therefore, the total capital proceeds received by a Fairfax Shareholder for the disposal of a Fairfax share under the Scheme was $0.6264 per Fairfax share held.  This is the aggregate of:
    • the Cash Consideration of $0.025; and
    • the market value of the Scrip Consideration as at the Implementation Date, being $0.6014 (calculated as 0.3627 multiplied by $1.658).  

The example uses the following data and assumptions, please amend accordingly for individual holdings.   

1000 FXJ shares purchased on 1 Dec 2014   

Purchase price on 1 Dec 2017:          $1.00
Total Cost:                                                $1,000.00

Instructions for Stock Doctor  

Step 1: Account for the cash consider of $0.025 per FXJ share

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  • Click New Dividend.
  • Enter Payment Date: 10/12/2018
  • Note: Cash consideration of $0.025 from FXJ/NEC merger

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  • Click on the Income tab, under “Other Taxable Income” input $25 (1000 shares x $0.025)
  • Click Save.

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Step 2: Account for new NEC shares

Under Trades and Adjustments

  • Click on 'Other Transactions'
  • Select 'New Reconstruction'Image_12.png
  • Date: 10/12/2018
  • Under New holdings for which rollover relief applies:
  • Enter Code: NEC
  • Enter Quantity: 363 (0.3627 x 1000 FXJ shares – rounded up)
    **Please check with your statements as to how many shares you have been allocated and input that number here if it is different to the calculation.
  • Enter Cost base rolled over (%) = 100%Image_14.png
  • Click on the Notes tab
  • Record the reason for this transaction: 'FXJ/NEC merger'
  • Click Save 
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You have now accounted for the merger.

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