Ron Walker, Fairfax chairman, has “gone native” – vastly enjoying his position as a media player with desires to grow Fairfax’s power and prestige. Too bad no-one seems to think he’ll have the opportunity to do so, with planning well advanced for a takeover and carve-up of one of Australia’s only three major commercial media voices.

John Alexander’s professed plan to more than double PBL Media to $10 billion-plus in three years precludes a direct takeover of Fairfax, but he’d certainly be in for a piece of the carcass in a Macquarie-led takeover.

Bryan Frith provides some rough takeover figures in his column:

By way of example, John Fairfax is currently capitalised at $4.8 billion and a takeover would probably require around $6 billion. At 70-30 that would mean $4 billion debt and $2 billion equity, of which PBL’s share would be 50 per cent, or $1 billion. That’s not to suggest that PBL Media has Fairfax in its sights, despite considerable speculation to that effect.

But if PBL just wanted, say, the New Zealand interests, the Fin Review and the suburbans, while other players took the rest, the equity cost becomes much less.

The same sort of numbers James Packer worked to make PBL Media happen could be applied to some of the Fairfax assets – not much upfront capital and plenty of debt to be serviced by what’s still good classified income from the Smage and online. And of course there’s the promise of cost cuts by greater amalgamation of the two broadsheets, and paying less to yet fewer journalists, reducing wages to ACP levels.

So, faced with a takeover and carve-up, what might Chairman Walker do? It’s tempting to speculate that, after mounting a sterling but failed defence to get his shareholders top dollar, he might well fancy a role as a mogul in his own right with some Melbourne establishment and private equity backing as executive chairman of The Age. David Syme & Co could ride again. And as a good Liberal-friendly organ as well.

But that’s just speculation, of course.

Peter Fray

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