Good morning, ladies and gentlemen. I'm your chair. Owners of country throughout Australia and pay my respects to their elders past, present, and emerging. We've got some shareholders here with us in person. Thank you for joining us, and others participating virtually. Significant technical problems during the meeting, we may adjourn the meeting until 3:00 P.M. to ensure all shareholders have an opportunity. Shortly after 9:00 A.M., and I'm advised that this is a properly constituted meeting and has a quorum of at least two meeting is read. The notice of meeting, independent expert's report, and a virtual meeting guide were provided to platform. Before we start, I'll run through some mechanics for the meeting. For people participating Please allow you to get a voting card, to ask a question, and to download documents such as the notice of meeting at the top of the page.
For those of you in the room, you should have received a card from the MUFG Market who are entitled to vote and ask questions have been issued with yellow voting cards. If there is anyone table. Non-voting shareholders should have a blue card. If you hold a blue card, you may make meeting. This is a shareholder meeting. You're not permitted to make comments or ask questions. Encourage participants to submit questions now. The company secretary will read out any questions at the appropriate time. All voting will be by poll. I declare the poll open now. You can lodge your vote at any time now using the online platform, or for people in the room, by completing your voting card and giving it to the people who are here with me this morning. They're in slightly different order. I've got Chris Halios-Lewis, WIN.
Next to Chris is Mickie Rosen, Independent Non-Executive Director and a member of the Audit and Risk Committee. The screen is going to be easier. I've got Mandy Pattinson, Independent Non-Executive Director and Chair of the People and Culture Committee and Audit and Risk Committee. I've got Andrew Lancaster, an Independent Non-Executive Director. Let's move to the formal business. We've called this general meeting to network. These businesses operate free-to-air television stations in northern New South Wales and Darwin re the sale to WIN. This ensures that Nine's premium content, including our news and sports programming. Two, an entity associated with Mr. Bruce Gordon, is a substantial shareholder in Nine and also the owner. ASX Listing Rule 10.1. Shareholder approval is required to proceed. The board closely with Nine's strategy to focus on metropolitan markets and accelerate our digital growth.
In addition to the AUD 20.5 million of cash proceeds, Nine expects to realize capital losses that the independent expert, Lonergan Edwards & Associates, has concluded that the transaction is fair and reasonable to all our shareholder approval required before we can complete the sale in early June. The number of direct and proxy votes received in favor of the resolution to the extent permitted. Are there any questions from shareholders in the room?
Yeah. David Kingston, K Capital. Look, I know this sector well. I used to personally own Spencer Gulf Telecasters. November AGM, I congratulated Nine on being the best traditional media company in Australia over the past decade. Since then, the sale of Domain at the big price has been accentuated with realestate.com.au to happen from private equity at AUD 850 million, which in my view is a bit excessive. Headline multiple 8.1. Let's turn to this transaction. NBN fail is to a substantial shareholder, WIN, which has an economic interest of around 25%. NBN contributes to approximately 30% of Nine's You mentioned in your address, Chair, in AUD 20 million, the formal sale if the Commercial Broadcasting Tax is waived, and also Darwin for AUD 500,000.
The sale will also provide a cash benefit to Nine of around AUD 100 million. Obviously, WIN will pay 50% of its NBN revenue to Nine. Let's turn to the Lonergan report. Some reports are good. AUD 20 million. Total consideration he assesses at 15.7 %- 15%. Let's look briefly, and then I'll come to some questions, at what Nine is giving up if this tax profit of AUD 42 million, albeit that is before adjusting for. Lonergan, just come to some questions soon, Chair. Lonergan surprisingly did not include any 5% per annum, which seems pretty aggressive. When you adjust for affiliate, which seems pretty tight. He's also applied a 12.5%-14% discount rate. EBITDA multiple.
Lonergan's adopted AUD 6.5 million EBITDA. The Seven West merger of equals, so no control premium, was done at three and a which when applying to AUD 6.5 million EBITDA, gives AUD 13 million -AUD 19.5 million. Is it fair that Lonergan has applied worthless at the end of 10 years? Is it fair that he's assumed NBN revenue?
Question. Thank you for your support of the team at Nine and the things that we've done in the past. We agree with your position. I know that we're largely aligned. Thank you, and thank you again for the support. In terms of this transaction with, for example, a Seven West Media transaction, there's a fundamental difference. I think as you know from your past experience, regional television is a very different operating challenge to television networks around the country and are expert in dealing with the additional operational complexity that they are better to be able to manage this asset than what we are. Hence our view that it makes sense. A couple of points. First of all, you do have to recognize there's a significant affiliate fee, as you mentioned, which is very important to us.
The difference that you need to take into account when you're comparing with other transactions is that I'm sure you've noted in that streaming service. Equally, obviously, Seven has a streaming service. In Australia, and so therefore we're capturing, as the audiences shift across, we're capturing value from Nine in terms of the multiple that you should apply, secondly, in terms of the terminal value. I don't have a view as to whether What I do have a view on is that I see that the terminal value in any standalone or migrating audience across to the streaming. I think that's probably the major difference in maybe the view. WIN is purchasing an asset where they don't have the benefit of the migration of digital audiences.
View, it's just bizarre that the transaction's going to shareholders with an indepen-. It used to be worth. To say it's worth nothing in 10 years' time, I think is very bizarre.
As the Independent Non-Executive Chair of Nine in free-to-air, as there's a shift across to the streaming service, which we capture. There's board to ensure that they're taken care of. That also has an impact on terminal value when you think about the valuation of.
It also has some challenges. Most of your contracts expire in five years or so. EBITDA, which reduces maybe into the sixes with synergies. To sell NBN at 2x - 3x .
Assessment, it's the assessment of the independent expert that it's a reasonable price to be achieved, for organization negotiated very hard to get the best price that he could. We get obviously, as you noted earlier, of significant tax losses as well. On a standalone transaction for all shareholders.
Matt, what's it like negotiating with a 25% shareholder who's got two board seats?
Had a very arm's length discussion and conversation, very pleased with where we got to. As all negotiations you do, you know.
Incredibly low multiple that's been applied to this sale.
No, we didn't. We didn't because we have a very clear strategy within Nine. Providing the benefits of the content that we create to all of Australia via a very different proposition from an operational perspective. If there's partners, whether it be WIN continue to get the benefit of the affiliate fees, and we can continue to get the benefit of national coverage of a streaming service.
As does Ten. I'm just surprised you didn't actually at least consider buying WIN out.
I think That performance is based on strategic decisions that we've taken. To have partners who can better manage the regional areas. As I say, we get to capture the benefit of the affiliate fee for shareholders.
Look, respect the decision, but I'm surprised if you didn't look at it.
Yeah.
Could've been a nice purchase.
Yeah. Again, I'd reinforce that We've spent a lot of time considering where we think the value is that we can deliver, and that's the conclusion that we came Look at Ten or Seven as the exemplars of that we should blindly follow. Indifferent to them has been beneficial to all shareholders.
Thank you.
Thank you. Are there any other questions? Okay, as there are no further questions, we'll move to the vote. The voting procedures. The votes that have been received for each resolution are shown on the screen. If you have a yellow voting For, Against, or Abstain box. Okay, have all the yellow voting cards Leave the Scrutineers' report on the poll. The results will be announced via notice to the ASX. Ladies, now have five more minutes to lodge your votes via the online system. The results of the poll will be announced to the ASX as Joining us in the room today. Thanks everyone for your participation.