Extract from The Guardian
A rival bid for the media company is not yet forming, despite furious speculation
Melbourne business interests, smaller media companies and members of
the Fairfax family are poring over assets in the newspaper empire that
might be on-sold following Nine’s takeover of Fairfax Media.
But a rival bid for the 177-year-old media company does not at this stage seem to be forming, despite concerns from two of the key shareholders in Fairfax that the cash and stock offer from Nine values the company too cheaply.
Since the takeover was announced, the share price of Nine has sagged, causing the premium in the offer for Fairfax of 22 cents to evaporate. Fairfax shareholders will receive shares in Nine plus cash under the deal.
But in one clear boost to the deal, the media mogul Bruce Gordon, owner of regional TV network WIN Corporation and Nine’s biggest shareholder with a 15%stake, said he supported the merger.
While Nine shareholders do not vote on the deal, Gordon will emerge as the largest shareholder in the $3.4 bn merged company. A mercurial operator, with a finger in several media companies, he had the potential to throw a spanner in the works.
“It looks like a sensible deal all around. I like it,” he said in a short statement to Fairfax Media on Wednesday.
Fairfax reported that Gordon was believed to have increased his shareholding in Nine on Tuesday, to avoid it being watered down once the merger occurs.
The prospect of a rival bid has been the subject of furious speculation in News Corp publications, with various private equity firms, former adman John Singleton and investment adviser Mark Carnegie, mining magnate Gina Rinehart and others being mentioned as possible suitors.
“Two private equity groups looked at Fairfax last year and if either had wanted to buy it they would done so at the time. Since then Domain has been spun off from Fairfax and that makes any buyout more complicated,” he said.
There may well be interest in the parts of Fairfax – the radio assets, the Age and the regionals – but it’s way too early to say what might be for sale.
Fairfax owns 54.4% of listed but tightly held Macquarie Media, home to Alan Jones and Ray Hadley, while Singleton owns 34%, following the merger of their radio assets in 2014. Singleton made offers to buy Macquarie back in 2017 but the offer was rejected.
One media executive, who asked not to be named, suggested Singleton and Carnegie would struggle to raise sufficient funds to be able to make a full bid for Fairfax, which would be necessary to control the carve-up, although they may renew their interest in the radio assets.
A spokesperson at John B Fairfax’s private investment company, Marinya Media, refused to comment.
However, interests associated with John B Fairfax and Irish media mogul Cameron O’Reilly are understood to have injected funds into Eric Beecher’s Private Media, publisher of Crikey, in recent weeks. Asic records show Bayard Capital (Ireland) is now a significant shareholder in the Melbourne-based media company.
A number of Melbourne interests have expressed interest in the past in the Age, though its business and newsrooms are now deeply intertwined with the Sydney Morning Herald. It is not clear Nine would want to part with either.
It seems very likely some or all of the regional publications will be up for sale if the Nine-Fairfax deal completes.
Asked about the future of the regionals and New Zealand newspapers, Nine CEO Hugh Marks said at his first briefing: “those other businesses that may not fit that high-growth model may be better serviced by being part of some other environment.”
Media academic Margaret Simons says people should not assume that all regional publications are unprofitable, and that there may be solid businesses among the Fairfax stable of 160 publications.
The regionals might also be of interest to the regional television operators such as Prime, which could realise synergies across newsrooms.
Under the terms of the Fairfax-Nine deal, Fairfax shareholders will receive 0.3627 Nine shares and 2.5¢ in cash for each Fairfax share they hold. This implied a 22% premium to Fairfax’s share price the day before the deal was announced, or a price of 94¢.
But steeper than expected declines in Nine’s share price since have eroded the premium Fairfax shareholders were due to receive, posing a potential threat to the deal.
But a rival bid for the 177-year-old media company does not at this stage seem to be forming, despite concerns from two of the key shareholders in Fairfax that the cash and stock offer from Nine values the company too cheaply.
Since the takeover was announced, the share price of Nine has sagged, causing the premium in the offer for Fairfax of 22 cents to evaporate. Fairfax shareholders will receive shares in Nine plus cash under the deal.
But in one clear boost to the deal, the media mogul Bruce Gordon, owner of regional TV network WIN Corporation and Nine’s biggest shareholder with a 15%stake, said he supported the merger.
While Nine shareholders do not vote on the deal, Gordon will emerge as the largest shareholder in the $3.4 bn merged company. A mercurial operator, with a finger in several media companies, he had the potential to throw a spanner in the works.
“It looks like a sensible deal all around. I like it,” he said in a short statement to Fairfax Media on Wednesday.
Fairfax reported that Gordon was believed to have increased his shareholding in Nine on Tuesday, to avoid it being watered down once the merger occurs.
The prospect of a rival bid has been the subject of furious speculation in News Corp publications, with various private equity firms, former adman John Singleton and investment adviser Mark Carnegie, mining magnate Gina Rinehart and others being mentioned as possible suitors.
“Two private equity groups looked at Fairfax last year and if either had wanted to buy it they would done so at the time. Since then Domain has been spun off from Fairfax and that makes any buyout more complicated,” he said.
There may well be interest in the parts of Fairfax – the radio assets, the Age and the regionals – but it’s way too early to say what might be for sale.
Fairfax owns 54.4% of listed but tightly held Macquarie Media, home to Alan Jones and Ray Hadley, while Singleton owns 34%, following the merger of their radio assets in 2014. Singleton made offers to buy Macquarie back in 2017 but the offer was rejected.
One media executive, who asked not to be named, suggested Singleton and Carnegie would struggle to raise sufficient funds to be able to make a full bid for Fairfax, which would be necessary to control the carve-up, although they may renew their interest in the radio assets.
A spokesperson at John B Fairfax’s private investment company, Marinya Media, refused to comment.
However, interests associated with John B Fairfax and Irish media mogul Cameron O’Reilly are understood to have injected funds into Eric Beecher’s Private Media, publisher of Crikey, in recent weeks. Asic records show Bayard Capital (Ireland) is now a significant shareholder in the Melbourne-based media company.
A number of Melbourne interests have expressed interest in the past in the Age, though its business and newsrooms are now deeply intertwined with the Sydney Morning Herald. It is not clear Nine would want to part with either.
It seems very likely some or all of the regional publications will be up for sale if the Nine-Fairfax deal completes.
Asked about the future of the regionals and New Zealand newspapers, Nine CEO Hugh Marks said at his first briefing: “those other businesses that may not fit that high-growth model may be better serviced by being part of some other environment.”
Media academic Margaret Simons says people should not assume that all regional publications are unprofitable, and that there may be solid businesses among the Fairfax stable of 160 publications.
The regionals might also be of interest to the regional television operators such as Prime, which could realise synergies across newsrooms.
Under the terms of the Fairfax-Nine deal, Fairfax shareholders will receive 0.3627 Nine shares and 2.5¢ in cash for each Fairfax share they hold. This implied a 22% premium to Fairfax’s share price the day before the deal was announced, or a price of 94¢.
But steeper than expected declines in Nine’s share price since have eroded the premium Fairfax shareholders were due to receive, posing a potential threat to the deal.
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