Australia's Fairfax Sold to Canada Magnate
AFTER a year of debate and nationalistic haggling, Canadian publisher Conrad Black appears to be the successful bidder for John Fairfax Proprietary Limited, Australia's premier newspaper and magazine company.Mr. Black, owner of the London Daily Telegraph, Britain's largest newspaper, bid $1.5 billion (Australian; US$1.2 billion) to buy Fairfax, which owns the Sydney Morning Herald, the Age of Melbourne, and the Financial Review. His bid topped those of Tony O'Reilly, the chairman of H.J. Heinz, and Australian Independent Newspapers, a Melbourne group. Black's successful bid completes a saga that has dominated the press and involved three federal treasurers, two ex-prime ministers, and a parliamentary inquiry. Black, who headed a group called the Tourang Syndicate, had to change his bid several times to finally capture Fairfax. The battle over Fairfax has raised questions about Australia's openness to investment at a time when the country is short of investment capital. The Australian Broadcasting Tribunal (ABT) objected to the 10 percent nonvoting ownership of Hellman & Freidman, a California investment company. Earlier this month, the ABT had objected to the inclusion of Kerry Packer, Australia's richest man and owner of the Consolidated Press magazine and television empire. Mr. Packer dropped out of the Tourang syndicate after the ABT announced it would begin an inquiry into his ownership. Australia has rules forbidding cross-ownership of media. Black said last week the ABT investigation into the extent of foreign ownership was a national disgrace. Packer has suggested it would inhibit future investors in Australia. But two former prime ministers, Malcolm Fraser and Geoff Whitlam, objected to the foreign bids. Journalists employed by Fairfax became part of the battle as well, organizing rallies against the Tourang bid. The journalists, called Friends of Fairfax, asked the bidders to sign a charter of independence, which would prohibit the owner of the paper from interfering with editorial decisions. Black refused to sign the charter and now Fairfax journalists threaten to strike. Black is expected to trim Fairfax's staff. The Tourang group will invest $365 million (Australian; US$285 million) in equity. Black will own 15 percent, Hellman & Freidman 5 percent and owners of junk bonds 5 percent. The rest will be sold to the public. Fairfax has been in receivership for a year.