Regular readers of Livewire may recall some of our previous comments on Fairfax Media early last year, then subject to multiple private equity bids from both a TPG consortium and Hellman & Friedman. Last week, the market awoke to news of a Nine Entertainment (NEC.ASX) and Fairfax Media (FXJ.ASX) merger of equals, once again showcasing the demand for the Fairfax asset base.
Since both TPG and Hellman & Friedman walked away from any potential transaction last year, the landscape has shifted. Significant changes to media ownership laws were passed through the Senate in September 2017, scrapping the big “two out of three” rule restricting platform diversity in the same geographic location, and the “reach rule” limiting audience reach to a maximum 75% of the population. There was consensus that the changes opened up the media sector to consolidation, companies were free to build multifaceted platforms to stave off foreign competition.