Fairfax Business Media chief Michael Gill is frantically trying to derail a $36 million deal that would see The Washington Post company become the biggest player in financial services education in Australia.
The Financial Services Institute of Australasia (Finsia) — an amalgam of the old Securities Institute and the Australasian Institute of Banking and Finance — announced the sale of its educational publishing business to the Post’s Kaplan division at its AGM on 23 April.
Two days later, Fairfax bumbled into the action with a highly conditional offer claimed to be worth $42 million and now Gill is writing to Finsia members in the following terms:
Dear Finsia member,
The explanatory memorandum distributed for your vote on the sale of Finsia Education notes correctly that Fairfax Media has made a conditional offer higher than that which the Finsia board recommends.
Our offer was delivered two working days after the proposed sale was announced. We are not aware that any prior notice of the sale nor any process of sale was made public. As the memorandum notes, our bid was conditional as there was no opportunity to review data other than that available publicly.
On 2 May we confirmed in writing the fact that the Fairfax offer should be viewed as $42 million, assuming that the preference was to accept $40 million in cash and $2 million in Finsia advertising across Fairfax products in Australia and New Zealand.
We note that the sale price proposed is $36 million. Fairfax has underway plans to develop investor and business education products and services and remains keen to service Finsia members and constituents.
Chief Executive Officer
Fairfax Business Media
It seems very strange that the Fairfax press is yet to report this move given that Finsia has about 20,000 members and Gill is now openly campaigning before voting closes on 14 June.
Neither Finsia’s leaders or Gill were available for comment before today’s deadline, but Crikey understands Fairfax has little chance of blocking the 50% approval needed because Finsia wanted to sell to a quality global player, rather than a local media conglomerate that wants to start a new division. Given that Finsia is a member services not-for-profit, the quality of the service is more important than the price. Gill also cruelled his pitch by last week canceling discounted subscriptions to The AFR for Finsia students and through the bungled handling of AFR Access.
Fairfax journalists, who are suffering cut-backs and expecting more belt-tightening to justify the Rural Press merger, will also wonder about the merits of an expensive entry into the financial educational business which is now very competitive.
With 32 global campuses and $1.7 billion in revenues, Kaplan is clearly a long way ahead of Fairfax when it comes to educating Australian financial services professionals.