Fairfax Media chief executive Greg Hywood says the embattled media group has investigated a break-up of its assets and found the numbers didn't stack up.
Mr Hywood said Fairfax management had not "blithely" decided to keep the company in its current form.
"We did a lot of work ... around whether the break-up scenario was appropriate and in the end it wasn't," he told a Citi investment conference in Sydney today. "You had to forgo significant cost and revenue synergies."
The Fairfax boss said demerging the Sydney Morning Herald and Age metropolitan newspapers from the company’s online businesses would have required placing a large debt load on the rest of the company.
"Then there were significant debt break-fees and there were some very significant transaction costs involved," Mr Hywood said.
He said the remaining business would not have been a sustainable one because it would have comprised "a range of disconnected platforms that didn't allow you to get the sort of value out of the market that you need".
Mr Hywood said Fairfax’s "total media solution" model of print, online, smartphone and tablet offerings was a "powerful proposition" for advertisers.
Previously Simon Marais, managing director of major Fairfax shareholder Allan Gray, called for the break-up of Fairfax, criticising the "cross-subsidisation" of the high-cost, metropolitan print business by more profitable regional newspapers and web-transaction businesses.
Mr Hywood faces Fairfax shareholders at the company's annual meeting in Melbourne tomorrow.
Fairfax reported a $2.73 billion loss for 2011-12 as a result of massive write-downs on the value of its newspaper mastheads and the company's shares are at a record low of 37.7 cents.
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