Monday 09 May 2016 12:33 PM
Fairfax mulls options for NZ division; won't comment on possible spin-off
By Jonathan Underhill
May 9 (BusinessDesk) - Fairfax Media says it has nothing to disclose about its New Zealand operations after The
Australian newspaper reported it was considering an A$200 million spinoff of its New Zealand newspapers, magazines, and
digital business.
"Fairfax continues to explore options for all its businesses including Fairfax New Zealand, but at this time, there is
nothing to disclose," the Sydney-based company said in a statement, responding to media reports.
In February, the Australian media group reported a 4.2 percent increase in first-half profit to A$26.3 million as
revenue edged up 1.6 percent to A$958 million. The New Zealand division posted a 12 percent decline in first-half
earnings, which the publisher of the Stuff website and a suite of regional titles including the Dominion Post, Press and
Sunday-Star Times newspapers said reflected gains in its online revenue. However, those gains didn't offset the ongoing
advertising decline in its traditional print publications. Advertising revenue fell 9.2 percent to $119.8 million.
The New Zealand division increased digital revenue 43 percent without disclosing any detail. It also said its flagship
Stuff website retained its top spot among domestic websites. The Australian group is placing an increased focus on
digital business as a whole, with online revenue accounting for about 20 percent in the first half, twice as much as it
did five years ago.
The Australian newspaper said that a spin-off could involve a demerger of shares to existing shareholders, an initial
public offering, or a trade sale. The move could be part of efforts to have the stock market put a higher value on the
company, which it believes it deserves, the News Corp newspaper reported.
Fairfax stock last traded at 80 Australian cents on the ASX and has fallen 20 percent in the past 12 months, while the S/ASX 200 Index has fallen just 6 percent. The stock is rated a 'buy' based on the consensus of nine analysts surveyed by
Reuters.
A demerged Fairfax New Zealand could end up footing it with APN News & Media on the NZX, with APN also contemplating a demerger of its New Zealand assets, most likely through a distribution
of shares to existing investors. The Australian newspaper said Fairfax and APN had held talks about a possible merger of
their New Zealand operations.
It said APN was expected to undertake a capital raising in excess of A$200 million in conjunction with a demerger. APN
shares last traded at 63 Australian cents on the ASX and have declined 30 percent in the past 12 months. They are also
rated a 'buy'.
(BusinessDesk)
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