Date: December 31 2012
Fairfax Media shares have jumped more than 5 per cent this morning after confirmation that Mark Carnegie and John Singleton had bought into the company.
But this morning's ASX filing revealed the pair, investing through the Macquarie Radio Network, the Gutenberg Investments Unit Trust and two vehicles linked to Mr Carnegie's activist Companion Fund, had acquired just 3.6 million Fairfax shares, or 0.15 per cent of the company - a stake worth less than $1.8 million.
Fairfax shares jumped 2.5c to 50c in early trade this morning.
Mr Carnegie and Mr Singleton aimed to acquire up to 4.9 per cent of Fairfax before informing the market but on Friday were told by lawyers Gilbert and Tobin that they must disclose their investment today because they were associated with mining magnate Gina Rinehart, who owns 14.99 per cent of Fairfax. Their combined holding amounts to 15.14 per cent, according to today's ASX filing.
Mr Singleton and Mr Carnegie together own the majority of Macquarie Radio which last year bid unsuccessfully for Fairfax Media's radio assets, including Sydney's 2UE and Melbourne's 3AW.
BBY media analyst Mark McDonnell said Rinehart, who failed in a bid for a board seat this year, “may not require long-term retention of the radio stations at Fairfax, so it's entirely possible a deal has been struck or is under discussion” between her and Mr Singleton.
Mr McDonnell told Bloomberg in an email on Sunday that Mr Singleton's remarks "suggest that he is still more interested in the radio stations than anything else".
Fairfax chief executive Greg Hywood has expressed his preference for a bid for the entire company rather than a split of assets, Mr McDonnell said.
If Singleton “acts in concert with Rinehart and others, he may well achieve a separation of the radio businesses via a change of control,” McDonnell said. “I'd expect the radio assets to be valued on a higher earnings multiple than the metro papers.”
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