Fairfax Media Limited (ASX: FXJ) shareholders have voted overwhelmingly in favour of plans to separate its lucrative real estate business, Domain.
The Fairfax board urged the company's shareholders to vote in favour of the scheme on Thursday and 99% did so.
Fairfax Chairman Nick Falloon said the vote is an "important milestone" in the company's attempt to "build shareholder value".
The Fairfax share price took a hit in July, plunging back down below $1 after TPG Capital and Hellman & Friedman scrapped their prospective buyouts after weeks of due diligence.
Fairfax then reverted back to its idea to spinoff Domain, a move which Fairfax presumably hopes will demonstrate a greater value for Domain than that which the market currently prices it at under Fairfax's wing.
While the Fairfax share price has struggled over the past year, REA Group Limited (ASX: REA), Domain's rival, has seen its share price increase by almost 50%.
The Fairfax share price has made a slight comeback since the failed buyouts as the media company progresses towards the realisation of the Domain spinoff, closing on Thursday at $1.09.
Fairfax will now seek the separation's approval from the Federal Court, with a hearing scheduled for Monday.
Under the spinoff plans, shareholders will receive one Domain share for every 10 Fairfax shares they own and Fairfax will retain a controlling stake of 60% of Domain.
Domain shares are due to start trading on the ASX on a deferred settlement basis on Thursday, 16 November 2017, pending the Court's approval.
Fairfax, with a market value of $2.52 billion, reported a net profit after tax of $83.9 million for FY17, with Domain making a significant contribution to that figure.
It's been a tough few years for Fairfax and Australia's other major media companies, News Corp (NWS) and Seven West Media Ltd (ASX: SWM).
Now there's talk of a grim future for companies with a hand in real estate.
Some have suggested that recent downward trends in Australia's property market will hit Domain's bottom line.
But one of Domain's key markets, Melbourne, is proving resilient as Sydney begins to slow.
And, while properties take longer to sell, that could mean more time occupying space on Domain's site.
