Rupert Murdoch’s News Corp has
bought a 7.5 per cent strategic stake in newspaper publisher
Fairfax Media for $360 million.
News Corp says the move is not a precursor to a full takeover of
the publisher of The Sydney Morning Herald, Melbourne’s
The Age newspaper and The Australian Financial
Review.
“It is true, it is purely an
investment and is entirely friendly to the existing Fairfax board,”
News Corp spokesman Andrew Butcher said from New York.
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>”There’s nothing more to it than that.”
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>Goldman Sachs JBWere tapped select institutions after the close
last night to buy Fairfax shares at $5.20, a 10 per cent premium to
the $4.74 closing price.
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>The move comes just days after James Packer cashed in PBL’s
$4.5-billion media stakes to enlarge his gaming ambitions this
week, while Kerry Stokes’ Seven Network took a 14.9 per cent
interest in West Australian Newspapers.
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>New laws that passed the lower house of federal parliament this
week will relax cross media and foreign ownership laws in
Australia, once they are introduced.
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>Fairfax director, corporate affairs, Bruce Wolpe, refused to
comment.
>News Corp would not say if it was looking at other Australian
media merger, takeover or acquisition opportunities.
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>”I wouldn’t comment on anything else,” Mr Butcher said.
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>Fairfax shares gained one cent to $4.74 yesterday, having risen
dramatically over the past month on speculation it was a target for
one of Australia’s biggest media companies.
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>James Packer’s new PBL Media, Kerry Stokes’s Seven Network
and News Corp were among the potential buyers named.
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>Goldman, which has an advisory role for Rupert Murdoch’s News
Corp, successfully acquired 69 million Fairfax shares as part of
the deal, after contacting Fairfax’s five key institutional
shareholders.
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>Before the raid, News Corp reportedly owned six million Fairfax
shares.
>Goldman, which was unlikely to be acting for another party
without Mr Murdoch’s permission, assured the sellers there was no
imminent takeover bid.
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>Rural Press, Macquarie Media, West Australian Newspapers and
Seven Network have reportedly ruled themselves out of the race.
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>APN News and Media, for whom Goldman has also acted, is also
reportedly not involved.
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>The strategic 7.5 per cent stake places News Corp in a position
of leverage in any break-up of Fairfax, also affording it the power
to block another major player bidding without paying a huge
premium.
>
>The Fairfax raid is the latest major shake-up of Australian
media interests, with Southern Cross Broadcasting yesterday saying
it was in preliminary talks with other media companies.
>
>James Packer cashed in PBL’s $4.5-billion media stake to
enlarge his gaming ambitions this week, while Kerry Stokes’ Seven
Network took a 14.9 per cent interest in WAN.
>
>Elsewhere in the media sector yesterday, Southern Cross sagged
25 cents to $14.50 and PBL shares slipped 64 cents or 3.1 per cent
lower at $19.95.
AAP
