Fairfax, Macquarie in radio merger talks
Two years after talks between the two companies broke down, Fairfax and Macquarie are believed to be in preliminary discussions about forming a venture in which Fairfax would retain management control and a majority stake.
Fairfax Media, the publisher of BusinessDay, operates seven metropolitan radio licences across Australia, including 3AW in Melbourne and Sydney's 2UE. These assets reported $105.1 million total revenue for 2013, up 8.1 per cent, and were recently valued by investment bank Morgan Stanley at between $167 million and $297 million.
Macquarie Radio operates two Sydney metropolitan AM radio stations, 2GB 873 - home to shock jocks Alan Jones and Ray Hadley - and 2CH 1170. It also owns eight stations based in regional Queensland, and a public relations agency. It reported revenue down 10 per cent to $57 million for the year to June.
Macquarie Radio's shareholders include advertising man John Singleton and prominent investor Mark Carnegie, who together own a small stake in Fairfax.
Fairfax Media's largest shareholder, mining billionaire Gina Rinehart, has previously called for Fairfax to sell its radio assets.
Macquarie Radio is believed to have offered between $200 million and $250 million for Fairfax's radio assets in 2011.
Its recent annual report revealed a suspension of advertisements on Jones' radio program - sparked by offensive comments about the father of former prime minister Julia Gillard - led to a $3 million to $4 million hit in revenue.
"We were also disappointed in the first half of the year by the revenues generated from our London Olympic broadcasts, and a Sydney radio market which failed to regain any real momentum in the second half of the year despite strong growth in other markets," Macquarie Radio said in an annual report released last month.
Frequently Asked Questions about this Article…
Fairfax Media and Macquarie Radio Network are in preliminary talks about forming a joint venture that could create a national radio network with more than $150 million in annual revenue. For investors, the talks matter because the deal would combine metropolitan and regional radio assets, potentially affecting revenue scale, valuations and strategic direction for both companies.
Fairfax’s radio assets include seven metropolitan licences such as Melbourne’s 3AW and Sydney’s 2UE. Macquarie Radio operates Sydney AM stations 2GB and 2CH, eight regional Queensland stations and also owns a public relations agency. These are the assets discussed in the proposed venture.
Fairfax’s radio assets reported $105.1 million in total revenue for 2013 (up 8.1%). Macquarie Radio reported revenue of $57 million for the year to June (down 10%). Together the combined network would generate more than $150 million in annual revenue according to the article.
Investment bank Morgan Stanley recently valued Fairfax Media’s radio assets in a range between $167 million and $297 million, according to the article.
According to the preliminary discussions reported, Fairfax would retain management control and hold a majority stake in the proposed radio venture.
Yes. Macquarie’s annual report noted that a suspension of advertising on Alan Jones’s program—after offensive comments—caused a $3 million to $4 million hit to revenue. The company also said Olympic broadcast revenues and a weak Sydney radio market hurt performance in the year to June.
Macquarie Radio shareholders include advertising executive John Singleton and investor Mark Carnegie, who also own a small stake in Fairfax. Fairfax’s largest shareholder, mining billionaire Gina Rinehart, has previously urged Fairfax to sell its radio assets.
Yes. In 2011 Macquarie Radio is believed to have offered between $200 million and $250 million for Fairfax’s radio assets, as reported in the article.
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