FXJ

[younga]

Old Fairfax has had a bit of a rise in the last couple of weeks. Just wondering if something is in the wind - another possible takeover? Does anyone know when the new media laws gets passed.

[Flying Goat]

quote:Originally posted by younga

Old Fairfax has had a bit of a rise in the last couple of weeks. Just wondering if something is in the wind - another possible takeover? Does anyone know when the new media laws gets passed.


Hi Younga

The big jump ocurred when Rupert Murdoch purchased a >7% stake in the company a week or two ago, off market but at a price significantl above market - unfortunately just about one month after I sold off all my FXJ :( Other than that its just the usual frenzy that goes on in a sector that is being shaken up, check out APN for example, Tony Oreilly has alreay moved on that one... Not sure about the detail on the laws, I thought they were all but passed already [?] but might wrong.

My personal opinion on Fairfax is that it has a lot of strong media brands and the diamond that is Trademe in the stable, but I was NOT very enthusiastic about the debt level so took the conservative route and quit while ahead. In saying that, like any media company the cash flows are SUPER STRONG and I guess that is how they manage to carry a lot of debt in a not-too-dangerous way.

Cheers
FG

[BRICKS]

FXJ is in an interesting position the share price is at an all time low is a good DIV
payer and if you buy/read "THE DIMMINION" well this is your STOCK..

[POSSUM THE CAT]

BRICKS is this the imaginery newspaper that you get all your share imformation from? THE DIMMINION"

[BRICKS]

BRICKS is this the [imaginery] newspaper that you get all your share [imformation] from? THE DIMMINION"

SORRY DOMINION soon to be in BRICKS portfolio so can you afford SOME..

PS. check your spelling to.

[bear]

Fairfax's problem is its growth areas are very limited to internet related businesses such as Trade Me.

The traditional forms of print media are all struggling with negligible growth, higher costs and a reduction is advertising and margins - the strike also didn't help - all round a marginal business model. For Fairfax this marginal aspect of the business is a huge component and drags on the overall prospects.

Prior to the profit result a few months back i researched extensively and after speaking with a few Aussie mates decided at the time it was not for me. As it pans out the price and market has dropped more and div improved.

If you want a price plodder and just in for the divi it's probably ok but growth is not likely unless things change dramatically

bear

[BRICKS]

Chairman statement.

With over 300 mastheads [papers] across Australia, New Zealand and the United States, more than 50 major websites, and 15 radio stations, we are the largest content generators in Australasia.

Our content reaches over 10 million people each week in Australia and New Zealand.

Sounds Good to me..

[macduffy]

I'd try to look past sheer size here.

GM and Ford are two of the biggest carmakers still but I wouldn't be buying their shares!


;)

[bear]

Chairman statement.

With over 300 mastheads [papers] across Australia, New Zealand and the United States, more than 50 major websites, and 15 radio stations, we are the largest content generators in Australasia.

Our content reaches over 10 million people each week in Australia and New Zealand.

Sounds Good to me..

Look further than what they are and look at sales, advertising revenue, profit, margins, costs, and future prospects - you will find it marginal at best

when advertising revenue increases, and circulations increase it could be a time to buy - but i think there are far better opportunities out there.

Bear

[POSSUM THE CAT]

Bricks Would not touch with A barge Pole Just try getting into any of there web sites. Also I average 20 emails a day from Fairfax trying to sell me something. When I was in Australia they cancelled my AFR subscription when they had row with local news agent. Could not get another newsagent 1km away to take over delivery or have a prepaid copy held at his premises for me to pick up. Has deteriated ever since David Kirk took over management.

[BRICKS]

Look further than what they are and look at sales, advertising revenue, profit, margins, costs, and future prospects - you will find it marginal at best

when advertising revenue increases, and circulations increase it could be a time to buy - but i think there are far better opportunities out there.

Bear

More,

>Revenue increased 34% to $2.92 Billion
>EBITDA grew 46%to $818.3 Million
>Net profit after tax $386.9 Million up 47%
>Earnings per share 24.6 cents up 8.15%

Looking good..

[POSSUM THE CAT]

BRICKS such a good buy Fairfax. I hope you bought more at open this mornig. Such a good investment only down 10% so far today. I will make you a generous offer of $0.001 for every share you hold to put you out of your Misery

[BRICKS]

BRICKS such a good buy Fairfax. I hope you bought more at open this [mornig]. Such a good investment only down 10% so far today. I will make you a generous offer of $0.001 for every share you hold to put you out of your Misery

YOUR such a nice ass the above did not happen i will just get back to my BIZ..

PS check your spelling..

[BRICKS]

Talk about catching a falling knife FXJ has been a good example but feel a lot of panic
selling has been going on and by weeks end the price has smoothed out bought at a low price
now to see what will happen. As this is a prime company these price`s wont last long
unless this Meltdown gets out of CONTROL..

[POSSUM THE CAT]

The B.R.I.C.K.S. Share indicator says it is an urgent sell.

[BRICKS]

The B.R.I.C.K.S. Share indicator says it is an urgent sell.

YOU repeat your self often yet you say nothing try being FUNNY..

[steve fleming]

Maybe coming into play??

All the newswires have picked up on this story this afternoon - Citi's analysis on why SEV may be keen on FXJ: (Citi is SEVs broker)



We believe SEV may consider spending some of its cash on FXJ. In this note, we analyse the risks/returns on two hypothetical funding structures, which ultimately result in SEV controlling FXJ.
Why would SEV acquire FXJ? — i) FXJ stock at an all-time low; ii) Fairfax family blocking stake now diluted to ~10%; iii) ultimately the combination of SMG, WAN and FXJ would create ANZ's largest cross-media platform; iv) at least an estimated $65m in immediate cost savings; v) SEV's investment in WAN indicates belief in long-term newspaper value; and vi) because its affordable.
We believe the FXJ share price being at an all-time low and the dilution of the Fairfax family's stake to ~10% post the rights issue have created a "once in a life time" opportunity for Stokes, a long-term believer in newspaper value.
It is affordable — We have run two acquisition scenarios in which SEV pays $1.50 per FXJ share. The key difference in the scenarios is if SEV takes immediate control or is content to wait for private equity exit (i.e. ~6yrs) to assume full control. Assuming the latter, we estimate SEV could end up with control of FXJ with ~ $350m firepower to spare.
How much can SEV pay? — Without debt funding and partnering private equity but assuming SEV/WAN want immediate control, we estimate $1.50 per FXJ share. However, assuming private equity control and SEV not retaining any cash, we estimate $1.85 per
WAN may need shareholder approval to make such a significant acquisition. Any delay here may see a significant premium built into the FXJ share price.
Related party issues — We note the WAN Chairman recommending a transaction of significant benefit to SEV may be considered a conflict of interest.
Regulatory constraints — We note perceived control of both SMG and FXJ/ WAN would require the divestment of FXJ's Radio assets, given the 2/3 cross-media ownership rule (i.e. ACMA would likely consider SEV to have control of TV, Radio and Newspapers in metro licence areas). However, we would view MMG or Supernetwork Radio as potential buyers of FXJ Radio assets.
Competition concerns — Despite any Radio divestment, the ACCC may have concerns over the impact to competition in key markets.
' Is $1.85 per FXJ share too low? — We note the average entry price (even post the rights issue) of existing long-term FXJ holders is likely above $1.85. A SEV bid above this level may rely on additional debt funding, which we believe may be difficult to secure given the current state of credit markets.

[Huang Chung]

Where have you been Steve? I've missed your commentary.

The change to the media ownership rules didn't create that made flurry of mergers and buyouts that everyone was expecting. Fairfax certainly carries an amount of old world prestiege, and probably would be appealing for someone like Stokes.

Not one for me though.....