Will Gina buy out Fairfax?

From The Australian:

FAIRFAX Media’s largest shareholder and Australia’s richest person Gina Rinehart is believed to be considering buying Fairfax if she can find the right leaders to run it.

The Australian can reveal Mrs Rinehart has approached business associates for suggestions on who could better manage or sit on the board of the newspaper publisher in the event that she did decide to launch a takeover bid for Fairfax.

The Australian understands Mrs Rinehart, who is worth $20.01 billion, would be more likely to buy Fairfax if she could find someone who had a strong vision to improve its future earnings.

Fairfax monthly share price over the past 10 years:

Fairfax share price 1

It’s a very interesting issue – buy out now, replace management and deal with the recalcitrant staff at The Age and SMH (the AFR continues to perform well) or buy the whole thing from the receivers in due course? The trade-off must be along the lines of the relative restructuring costs of each option, and permanent value loss from delaying any takeover.

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76 Responses to Will Gina buy out Fairfax?

  1. stackja

    The Australian understands Mrs Rinehart, who is worth $20.01 billion, would be more likely to buy Fairfax if she could find someone who had a strong vision to improve its future earnings.

    Judith Sloan?

  2. Infidel Tiger

    Fairfax would surely be worth more without the newspapers?

  3. Robbo

    Wait for the inevitable collapse so that the cabal of left wing idiots who currently control the editorial content are out on the streets looking for a job (I wonder what sort of moron would ever employ them?) and then start again. She could begin by changing the names on the mastheads as evidence that something new, sensible and honest has been added to the newspaper readership in Victoria and NSW. Only the loony lefties will have their noses out of joint with the implementation of such a plan and who gives a rats arse what they think or do?

  4. ar

    The best staff will jump ship to the New Daily…

  5. Greigoz

    If Labor manages to get back into power, one of two things will happen – (1) Under pressure from the luvvies, they’ll find a way to block the sale, or (2) Labor will give the ABC another few hundred million so it can hoover up all those spare Leftie journalists and editors – afterall, it’s their job-for-life valhalla right now.

  6. Nic

    Good luck cleaning those stables. Fairfax would still have a cabal of white anters living within it

  7. JC

    I’d pay Gina to be given the role as HR exit manager. Can you imagine the fun of firing the frightbats, grandpa Carlton, that babbling fool Gittins and Laura Tingles. How about cubby?

    One condition though would be that I be allowed to film the ‘exists’ and then put them up at the Cat.

    The start of the interview would go along the lines of…

    You’re fucking fired. Here’s the papers and get out as I’m busy.

    All this while looking at my finger nails figuring if any should be edged a little that evening.

  8. Bruce of Newcastle

    If I recall correctly she’s sitting on a fairly decent profit on her 10% even now. Another 20c per share would be very juicy. All legal too since she doesn’t have to make a bid, just stir up the lefties to a frenzy then sell out.

  9. Bill

    Unfortunately FXJ now has $100m Cash, no debt and some good profit makers (Domain & other websites). A receivership is one thing that wont happen.

    The papers are losing money, but I think even there the game plan may be to hang on until the next election, and hope Labore win and give them a bailout.

  10. Gab

    LOL Gina just loves setting off those tilted lefty head explosions.

  11. “The AFR continues to perform well”
    Not today-its notably thin-40pp.

  12. Alfonso

    Don’t wait until Labor gets back in and protects its media arm.
    Imagine ….Their ABC being slowly dealt to via management change, budget shrinkage and compulsory Charter obedience and Gina owns Ffax. Where’s a luvvie comrade going to get a job? There’s always the genetically statist left NZ Herald.

  13. H B Bear

    “The AFR continues to perform well” Not today-its notably thin-40pp.

    The Fin Review is Australia’s only daily, anti-business business pamphlet. La Tingle, Phabulous Phil Coorey, Chenoweth … it is as infested as the rest of the Fauxfacts corpse.

  14. Andrew

    The Fin Review is Australia’s only daily, anti-business business pamphlet. La Tingle, Phabulous Phil Coorey, Chenoweth … it is as infested as the rest of the Fauxfacts corpse.

    While they obviously can’t question ANY tenet of Flanneryism, they have tended to be slightly less communist than stablemate Pravda.

    Sorry Sinc, no receivership. There’s enough good assets to pay the debt. (I made a killing buying the hybrids in 2009, money good.)

    In fact, Gina6666 paid 81.8c for 9.9% of the company. So the swampies are actually helping embiggen her wealth – at least when it was 35c and plunging to bankruptcy they had the consolation that even if they lost their “jobs” (sic) that they would be dragging down Gina6666 a tiny bit. Now they don’t even have that – it must literally be killing them going to work every day to make Gina6666 richer.

  15. JC

    Unfortunately FXJ now has $100m Cash, no debt

    You are there’s no debt. Last time I looked there was around $1.2 billion of euro notes sitting on the balance sheet as long term debt. How did those ratbags repay that debt?

  16. Mike of Marion

    JC, you may need to find out what dealings have been undertaken to ‘hide’ $1.2B off the balance sheet.

  17. .

    1.2 bn of bonds can’t be hidden like manipulated data as “missing” heat in the ocean.

  18. Putin of Kensington

    The debt was repaid by selling digital assets, mainly TradeMe. None of the metropolitan titles,in luring the AFR, is profitable. In fact the AFR took a nasty turn in performance last year and is now in terminal mode with the Herald and The Age.
    Gina is dreaming if she thinks this investment can deliver.

  19. JC

    Mike

    I just had a look and their non current liabilities are around 4 hundi. Last time I looked, which was a couple of years ago they had the non currents running at around 1.2 bill. Where’s it all gonsky? It’s not as though those fuckers have been so profitable they paid out the debt from earnings. I also think they sold off some assets and perhaps those went to repay the debt.

  20. JC

    1.2 bn of bonds can’t be hidden like manipulated data as “missing” heat in the ocean.

    I don’t think so, but you’d never know with those fucking useless clowns. Did they have a a share issue or something? Dunno.

  21. Econocrat

    Their shareprice is inverse to the number of climate change articles they run.

  22. It pisses me off what they have done to the SMH. It’s gone from being an important paper to irrelevance.
    And since the shareholders aren’t in charge – management are – they are buying time while all the rats can safely swim away from the sinking ship, to the Monthly, the Guardian, the ABC, etc.

  23. .

    400 mn of debt and poor profitability two years running. The share price must be ramped up solely on takeover speculation.

  24. nerblnob

    How could any Australian newspaper – print or online – be a good investment these days?

    I’m clueless about the market but somebody with a clue please tell me where on earth would they get their revenues?

  25. .

    TEN is another left wing outfit that is a dire investment. They may need to be bought out again soon.

    Hopefully the new owner puts it down in a non-gentle manner and does something useful with the licence and tech.

  26. .

    nerblob – I’m sceptical about FaceBook.

    Look at their income statement. It looks as though insiders are fleecing it whilst it still has credibility. At best it is making a pitiful profit that shareholders will never get a cut of.

  27. stackja

    SMH printed edition headline: Retail entrepreneur goes from brassieres to beef
    SMH online headline Retail entrepreneur goes from bras to beef
    AFR fukd revisited

  28. stackja

    Fairfax owned Sydney radio 2UE has just made their two, who sound conservative and probably most successful personalities, there weekend 6am-noon hosts replacing a what sounded like a lefty. Meanwhile Angela ex-ABC is still employed in a new time-slot. Will this help ratings?

  29. egg_

    Will Gina buy out Fairfax?

    Will someone fixup Fairfax f*xup first?
    (Sorry)

  30. JC

    How could any Australian newspaper – print or online – be a good investment these days?

    AFR is. The UK daily Mail is. There are lots of newspapers offering decent returns on equity. I wouldn’t be surprised if someone buys Fairfax and is able to turn the dailies around. It’s not impossible.

  31. egg_

    I wouldn’t be surprised if someone buys Fairfax and is able to turn the dailies around. It’s not impossible.

    Particularly the AFR?
    Used to be a decent read…

  32. john constantine

    in an ideal world, gina sells her fairfax shares in a tender to the union super funds,at a profit.

    gina then buys the abc, and the collective colons of every swampie in the country constrict so clenchingly that they all pass out, then slip away painlessly in their comas.

  33. nerblnob

    AFR is. The UK daily Mail is. There are lots of newspapers offering decent returns on equity. I wouldn’t be surprised if someone buys Fairfax and is able to turn the dailies around. It’s not impossible.

    I can see how the Daily Mail is – their website seems spectacularly successful at click-baiting – with celeb pictures, mainly. But that’s working an international market from a strong domestic base in a country of 60m. I can’t think of many others who’ve made the transition from print to free online service so well.

    So the revenues from AFR are just advertising? Or am I missing something?

    Sorry to be so dense.

  34. JC

    I can’t think of many others who’ve made the transition from print to free online service so well.

    Wall Street Journal is another one that’s succeeded very well in terms of website subscription service.

  35. Bear Necessities

    Mining Entrepreneurs should stick to Mining Entrepreneurship.

    Todd Sampson will sort it out. :)

  36. Mining Entrepreneurs should stick to Mining Entrepreneurship.

    Let me correct that for you:
    “Entrepreneurs should stick to Entrepreneurship.”
    That’s better.
    (Try telling Warren Buffett to stick to one industry.)

  37. Oh come on

    Yes please please please let JC be HR manager. You could live-stream the firings. Pay per view. There’s a great little earner right there. Each retrenchment package would pay for itself 10 times over.

    In fact, you could rehire some of the most odious turds just to fire them again. A WWF type setup. Give JC a budget to set up stunts in the firing sessions, ie. bucketloads of cow poo to fall on Mike Carlton as he’s getting the chop. Champagne television.

  38. stackja

    SMH reports:

    Sun goes spotless, baffling scientists

    Now of course SMH says climate does not baffle scientists.

  39. Bear Necessities

    Mining Entrepreneurs should stick to Mining Entrepreneurship.

    Let me correct that for you:
    “Entrepreneurs should stick to Entrepreneurship.”
    That’s better.
    (Try telling Warren Buffett to stick to one industry.)

    Point taken. But the Australian history of Entrepreneurship diversification doesn’t have a good history.
    Case in point was Alan Bond with XXXX, Channel Nine etc.

  40. Oh come on

    JC: you could re-enact the Nazi People’s Court – you can let your inner Roland Freisler run rampant, screaming and berating the doomed FXJ employee before giving them the chop.

  41. areff

    It would take a relatively small cadre of competent editors to reshape, re-discipline and re-position the Age and SMH. Both papers continue as if they were still the gatekepers of all information, yet the bureaus have gone, the subs have gone, the presses have gone, the advertisers have gone, the readers have gone and most of the rags’ credibility gone with it. Fairfax is a gutted, hollowed-out sham — Oz journalism’s boiler room scam, and the only people who can’t see that plain as day are blessed to sit on the board or in editors’ offices.

    To re-build, start with an editorial staff of about 50 — and that includes artists, subs, copypersons and photo — and populate the newsroom with good, quirky writers. Only hire pirates, prepared to come over the gunwalls at a story with daggers gripped in their teeth. There was a golden age of Melbourne journalism — when wits like Keith Dunstan, Roger Atwood, and a mob of other competent journeymen like John Hamilton were writing popular, classy pieces about about a place they knew and loved. So don’t send nine hounds to nine footy matches each weekend; run one stellar piece on the round by someone with a brain, someone who can make it sing.

    The object would be to bring out a weekly magazine, but do it daily in tabloid format — a daily version of what Clay Felker did with New York Magazine in the late Sixties and have Melbourne talking about the Age once more. That’s the niche The Age has to occupy if it is to survive. The current Age is a non-entity in Melbourne. Irrelevant and ignored by a city it no longer understands, except for the strips of hipster hangouts on Brunswick Street, Sydney Road and St Kilda.

    You’d sell ad space up and down Toorak Road with that formula. Allowing, of course, that the commercial side saw the sort of revamping that editorial would need to go through.

  42. john constantine

    fire them?

    line up the cannons on the parade ground, lash them to the muzzles, then proceed down the line, blowing them from the guns. only way to be completely certain,and discourage the others.

  43. JC

    JC: you could re-enact the Nazi People’s Court

    OCO

    I always liked the “people’s court” in the last Batman movie. Dark Knight Rises. Yea I know, it was the sort of “court” the Greenscum and the Occupy Wall Street Crowd would have, but we could swing it around against them. I dunno what sort exile I’d have for the Fairfax lot. It would have to be creative though. Maybe dump the fuckers in the Antarctic seeing they’re always telling us it’s warming there.

  44. Sinclair Davidson

    areff – you should send a proposal to Gina.

  45. Oh come on

    I want to see show trials. Give JC a riding crop and a monocle and he can pace up and down in front of Carlton or Traceee Hutchison or whoever, ranting and bellowing and occasionally stopping to scream directly in their faces for their outrageously heinous crimes against the People.

    And when they’re in the carpark juggling the boxed contents of their desk and a few metre from their car, JC can drive a steamroller it or he can operate a crane which will drop a steel girder on it or a massive concrete block or somesuch.

    This is going to be awesome TV.

  46. JC

    Sinc

    Should I also send her one … you know, to hire me as the HR exit manager? The hiring would be gratis.

  47. Oh come on

    Drive a steamroller over it, at least

  48. Oh come on

    JC: whatever floats your boat. Just be creative!

  49. To re-build, start with an editorial staff of about 50 — and that includes artists, subs, copypersons and photo — and populate the newsroom with good, quirky writers.

    I can do quirky. Need to brush up my CV.

  50. JC

    I can do quirky. Need to brush up my CV.

    I do ruthless and vindictive. I wonder if there’s a place for me?

  51. .

    (Try telling Warren Buffett to stick to one industry.)

    He’s no banker, actually.

  52. egg_

    the only people who can’t see that plain as day are blessed to sit on the board or in editors’ offices.

    That’s yer problem, rigth there…

  53. Oh come on

    I envisage a hybrid of Judge Judy (with knitting grandmas cheering on the judge in the audience), a Stalinist purge era show trial, plus a Candid Camera-style stunt in the mix to further humiliate the victim.

  54. Gab

    Absolutely, it should be televised and on Channel Ten too. A Q&A format with JC as executioner the person firing them as they one by one – each in turn, mind to get maximum coverage – get seated on JC’s Panel of the Doomed. Before the metaphorical axe drops though, the audience – stacked with actual conservatives unlike the ABC Q&A lefty-stacked audience – gets to ask them questions. Much raucous laughter and jeering to follow as buckets of green goo followed by lumps of coal gets poured over each poor excuse of a journalist as they attempt to answer questions. Background music will be punctuated with Rupert’s hearty laugh as the doomed fall through an automatic-operated manhole cover in the floor.

    And it wouldn’t be a JC spectacular without scantily-clad nubile ladies parading on stage before each round of firings, expertly holding a display card to inform who’s on next in the hot seat.

  55. Oh come on

    Yes! Audience participation! Can we throw fruit?

  56. Oh come on

    They must account for their crimes, and if they are weaselly in doing so (which of course they will be) they will be pelted with tomatoes by a pitchfork-wielding mob.

  57. Oh come on

    This will be a pay-per-view bonanza.

  58. JC

    And it wouldn’t be a JC spectacular without scantily-clad nubile ladies parading on stage before each round of firings, expertly holding a display card to inform who’s on next in the hot seat.

    Yep. I think it would add a certain.. what do the french say.. a certain elan to the proceedings.

  59. Gab

    Can we throw fruit?

    Of course. And rotten vegetables (no, I don’t mean C Milne).

  60. custard

    If Gina did take over would she still have to appeal to a left wing audience? I mean in Melb and Sydney they have the Tele and Herald.

    Here in Perth we just the leftist (mainly) West Australian and the Murdoch owned shit heap ( it’s shocking) Sunday Times.

    The Hancocks had a go at newspapers here in the West decades ago and they were a failure.

  61. areff

    And after JC had sacked them, they would go downstairs to find all their bicycle tyres has been slashed.

    Please, Lord, make it so.

  62. Gab

    And after JC had sacked them, they would go downstairs to find all their bicycle tyres has been slashed.

    You have a truly evil mind, areff. I like you.

  63. Oh come on

    We can have a special Earth Hour sacking extravaganza which dispatches the shrillest of climate reality deniers…surrounded by revving Humvees and 44 gallon drums full of burning sooty coal.

  64. Oh come on

    Perhaps we could rig up a mock oil well that JC can set on fire.

  65. Jeremy

    You guys are having too much fun with stage 1. You need to think about stage 2. Who replaces the moonbats and frightbats? I suggest as a basic principle, that no-one who has a degree from an Australian journalism course be hired. This would at least give the management a chance of getting people who are honest and less prejudiced. They would have a less thorough knowledge of current left wing pieties, but maybe that is a good thing.

  66. Toiling Mass

    I like the idea about using Earth Hour.

    Turn off the lights for an hour and, when they come back on one hour, let them look around in dismay for all their colleagues who have disappeared.

    Let them learn why even our remote ancestors appreciated the value of carbon derived light at their command.

  67. Tom

    If Gina did take over would she still have to appeal to a left wing audience? I mean in Melb and Sydney they have the Tele and Herald.

    There is a giant unserved market in Melbourne and Sydney for breaking stories and longer reads that aren’t catered for by the Newscorp tabloid, 400-word-limit formula. In Melbourne in particular, the Herald-Sun is moribund and soulless. At least the Sydney Daily Tele has flair, but it’s still written to a tabloid formula designed to be read on buses and trains.
    The tabloid formula I’m thinking of is the London Evening Standard where I worked briefly years ago: breaking news and crackling good reads. As far as I know, the Standard is the world’s last surviving evening newspaper.
    “Tabloid” doesn’t have to lowest common denominator. Nor can it survive doing activist propaganda like the Fauxfacts tabloids, in which every story has to be fact-checked for a hidden agenda. Trustworthiness and credibility are the currency in news media; that’s why Fauxfacts now has no readership outside the zombie left (public service, NGOs, etc), who demand their daily KoolAid, whereas Pravda and ShakeMyHead.com were once bastions of the broad middle class.
    Gina, if you’re reading, Areff is your news editor at Pravda. Sinc has his email address. JC should at least be retained to advise on strategy. And Sinc should be your Melbourne publisher.

  68. blogstrop

    Only hire pirates, prepared to come over the gunwalls at a story with daggers gripped in their teeth.

    Sounds like fun; I’m in! But would that be gunwales, or the more colloquial gunnels?

  69. nerblnob

    “gunnels” is how you pronounce gunwales. Never heard it said any other way.

    As far as I know, the Standard is the world’s last surviving evening newspaper.

    Oh right, cos London is The World, dahling.

    Edinburgh, Glasgow and Aberdeen all still have evening dailies.

    There is a giant unserved market in Melbourne and Sydney for breaking stories and longer reads

    But does “readership” = “market” any more? I’m unconvinced.

  70. Petros

    I suggest as models the following newspapers: The NZ Herald, Austria’s Die Presse and Germany’s FAZ. These papers seem to get a nice balance of news, arts and culture, finance etc. I rarely find anything interesting in the Australian’s weekend edition.

  71. Tom

    Oh right, cos London is The World, dahling.

    London remains the world capital of newspaper/news media competition. There’s nothing like it anywhere else on the planet.

  72. Tom

    Edinburgh, Glasgow and Aberdeen all still have evening dailies.

    I stand corrected: Scotland is one of the dwindling few English-speaking communities that retains a sustainable appetite for evening newspapers. This tells me the TV news services there must be awful.

  73. Trev

    Do you think it’s coincidental that she has hired jason morrison ex 2gb/2ue to advise her on fairfax?

  74. stackja

    Tom
    #1391014, posted on July 22, 2014 at 9:49 am

    Sydney has MX.

  75. I still marvel at the coincidence that the share price began its plummet at about the time Rudd became Prime Minister. Whether this is because the paper was suddenly perceived not so much as a legitimate critic of a tired and stale Prime Minster as an uncritical intellectual fellator of his replacement(s), I cannot say for certain, but a strong suspicion to this effect remains.

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