Sir Anthony O'Reilly plans to use APN News & Media, in which Independent News & Media has a 41 per cent stake, and possibly Independent's wholly owned Wilson & Horton subsidiary in New Zealand, as vehicles for a takeover bid for Australia's main newspaper group, Fairfax. If successful, it could be worth more than #1.3 billion (£1.02 billion), and a move is expected within three months.
If APN and/or Wilson & Horton bid for Fairfax, it will be the second time in 10 years that Sir Anthony has made a pitch for a company that includes three of Australia's premier titles: the Age, the Australian Financial Review and the Sydney Morning Herald. On that occasion, a consortium headed by Independent News & Media lost to a rival bid from a consortium headed by the Daily Telegraph's Mr Conrad Black.
However the bid is structured, it is understood there will be no direct involvement by Independent to avoid any complications arising from Australia's complex and rigorous rules on foreign ownership of local media organisations. In addition, Independent's net debt of almost #1.5 billion would preclude it from becoming involved in a deal of this scale.
It was those Australian regulations on media ownership that led Mr Black to sell his shareholding in Fairfax, while the firm's future has been made more uncertain by the decision of local entrepreneur Mr Kerry Packer to sell his entire stake in Fairfax. Mr Packer sold because Australia's cross-ownership laws meant he could not bid for Fairfax because he already owns the Channel 9 TV network.
Sources in Australia have indicated that while APN, with its low debt and financial muscle, would be the front-runner if Fairfax ends up being a takeover target, there are also other potential bidders including Rural Press, West Australian Newspapers and WIN TV. But analysts have suggested that as long as Sir Anthony can convince the Australian authorities APN is a truly Australian company and free of outside control, there is little likelihood of a bid from APN being blocked.
APN, which operates a chain of regional newspapers in Australia and has local radio interests in Australia and New Zealand, reports its half-year results in mid-August and these should show strong growth.
