Fairfax Media signs off on $7m deal to sell managed funds website
Fairfax Media has signed off on a deal to offload managed funds internet site InvestSMART to Australasian Wealth Investments Ltd for $7 million.
Fairfax bought InvestSMART six years ago, an online business to provide retail investors with low-cost access to financial information and products.
But after a recent overhaul of rules surrounding financial advice, Fairfax said the sale of InvestSMART to a licensed financial services provider made sense so the business could continue to be developed for the benefit of clients.
The rules, which require licensing of financial advice and quasi-advice products, is expected to see a number of media companies reassess the way they provide these services. Announced in June 2009, the Future of Financial Advice package also compels financial planners to act in their clients' best interests.
Fairfax entered a binding agreement that hinges on completion of a capital raising by AWK to pay for the deal. If the transaction falls over, AWK will pay Fairfax a $150,000 break fee. Under the transaction, Fairfax will continue to promote Fairfax products to InvestSMART's client base.
Shares in Fairfax ended 2.9 per cent higher at 54¢.