Rumours are swirling this morning that Antony Catalano’s trailblazing Melbourne property glossy The Weekly Review is in the final stages of negotiations with Fairfax Media to sell half the publication for between $35 and $40 million, with Catalano set to return to the company he called home for 18 years.

The bombshell tie-up would bring to an end weeks of speculation that freshman Fairfax CEO Greg Hywood would soon move to plug the $20 million revenue hole gouged last year when Catalano — a former Age commercial tsar — stole away most of Fairfax’s premium advertisers and set up his giant killing real estate competitor.

Catalano categorically denied any negotiations had taken place this morning. “We haven’t spoken to them in the past, we’re not going to in the future and we’re certainly not selling at that price,” he said.

However, Crikey understands there have been extensive private negotiations between senior Fairfax executives and Catalano by sources directly familiar with the matter and that the sale has also been discussed at the highest levels of MMP Holdings, which owns Metro Media — the company owned by Catalano’s private Kirant Investments, a consortium of four leading real estate agents, lawyers Cornwall Stodart and accountants Lawler Draper Dillon.

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A sale would represent the second time Fairfax has bought back the key of bundle advertising contracts at the centre of the publication, having previously stumped up $67 million to purchase The Melbourne Weekly from Text Media in 2003.

It would enable The Weekly Review  to reach a détente with Fairfax’s Melbourne Weekly in the city’s leafy east to prevent the cannibalisation of existing markets and distribution routes since The Weekly Review launched last March. Under the mooted arrangement, Fairfax’s current suburban weekly publications under the Fairfax Community Network banner would move under a joint MMP-Fairfax concern.

Crikey understands that Catalano would be expected to be appointed as the CEO of the new joint venture.

However, there is another position vacant at the top of Fairfax’s Melbourne Publishing arm. Don Churchill retired from the role in July after overseeing significant falls in revenue at the hands of Catalano. Ex-Sales and Marketing director David Hoath has been acting since then.

Catalano departed Fairfax in August 2008 after failing to be offered the plum post of Age CEO that was handed to Churchill.

Fairfax sources have told Crikey that Catalano’s car was recently observed parked outside Fairfax’s Media House HQ. He is close to Fairfax CEO Greg Hywood and Hywood’s son Tom works at The Weekly Review in an advertising role.

However Catalano confirmed to Crikey that while his car was parked outside The Age office last week, he was merely picking up a copy of MX from a footpath receptacle that featured a picture of fiancée Stefanie at the Spring Racing Carnival.

In 2001, Hywood, then editing The Age, tapped Catalano — a well-connected property reporter — to run the commercial side of the business where he closed a number of memorable deals as a director of classified advertising. He managed to steal several advertisers away from Text Media until then-CEO Fred Hilmer called a halt on the day after the 2003 Grand Final when it became clear Fairfax was about to buy out Text.

Fairfax CEO Greg Hywood told Crikey early this afternoon that as the company was publicly listed he “was not in a position to comment at all” for this story.