LA-la land? News fosters Fairfax speculation

Feb 01, 2017 at 07:59 pm by Staff


With so much at stake, attention is focussed whether there is foundation to a report that Tom Gore's US$6 billion Platinum Equity may be nosing around Fairfax Media... or whether it is just a ploy to destabilise the Australian publisher.

The second report in three days in News Corp Australia national daily The Australian repeats claims a US-based fund is "sounding out" senior industry executives about ideas to buy the Australian assets of Fairfax Media, which owns The Age (Melbourne), the Sydney Morning Herald and the Australian Financial Review in Australia, as well as regional newspapers and highly-valued property website Domain.

"Some have pointed to private equity firm Platinum as the suitor," the report in the Australian's Dataroom business section - bylined Bridget Carter and Scott Murdoch - says. It quotes a source that "at least one party" has been approached by a Los Angeles-based PE firm which already has Australian interests.

Last August there were reports that Platinum - which bought 70 per cent of Australian directory publisher Sensis in 2014 - could be interested in Fairfax's regional newspapers, and might have been in the market for APN News & Media's Australian Regional Media business, had the sale of that to News Corp Australia been knocked back by the Australian Consumer and Competition Commission.

The report suggests that the mystery suitor would not be interested in Fairfax' New Zealand interests, which it quotes a Credit Suisse note saying the publisher "will likely sell or shut" if a merger with the former APN business, NZME is blocked by the NZ Commerce Commission. Fairfax has reported an unsolicited offer to purchase in that event, with other reports later suggesting $100 million available. The NZCC decision is due by March 15.

Carter and Murdoch's report says LA-based Platinum "is known to be eager to snap up media assets globally at opportunistic prices".

But you're reading this in News Corp's flagship Australian title, just after it completed the purchase of the APN ARM newspapers at what could certainly be described as an "opportunistic" $36 million... about twice what it earned in the previous year.

It's likely that News could also be in the market for Fairfax's regional newspapers in Australia - which effectively do not overlap the former APN ones - and surprisingly, that the ACCC would allow it to do so.

Apart from a few minor regional publishers, that would leave Fairfax surrounded and vulnerable on the east coast, a position News Corp and its executive chairman Rupert Murdoch would doubtless relish. The questions are how serious is Platinum's mooted interest, and to what extent Fairfax - the ASX value of which is greatly exceeded by that of Domain - might be destabilised by News' ongoing reports. On Monday, The Australian returned to its recurring "will they-won't they" theme of whether Fairfax would cut weekday print editions of its metro dailies, but with apparently little new to contribute.

Established in 1995 by Gore, Platinum Equity last month bought the businesses of US direct mail specialist Cox Target Media - of Valpak 'blue envelope' and Savings.com fame - from newspaper publisher Cox.

Platinum's forays into the newspaper business include the acquisition of the San Diego Union-Tribune, which it sold to a local entrepreneur in 2011.

-Peter Coleman

Pictured: Fairfax Media chief executive Greg Hywood

Sections: Newsmedia industry

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