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The proposed creation of a A$9 billion ($10.3 billion) transtasman print media supergroup this week with David Kirk at the wheel is a story of immense intrigue.
Not because Fairfax Media and Rural Press are sure to unite with 250 newspaper titles and a clutch of leading transtasman internet sites, but rather the return of the Fairfax family dynasty to the Fairfax shareholder registry.
If Australia has any semblance of aristocracy, the Fairfax family is its mascot. In a single stroke this week, John Brehmer Fairfax, deputy chairman of John Fairfax before the disastrous effort in 1987 by his then 27 year-old cousin, Warwick Fairfax Jnr, to take over the company, is back as a central player in the company his forebears began in 1841.
It's taken nearly 20 years but John B. Fairfax has put the Fairfax back into Fairfax after "Young Warwick", as he was known, splurged more than A$2 billion buying the company with junk bonds courtesy of the late and notorious Western Australian financier, Laurie Connell. The deal was completed just before the stockmarket crash of October 1987 and in less than three years Fairfax was in receivership.
As part of the deal in reluctantly selling their family stake in John Fairfax, John B, his brother Tim and father Vincent were paid A$300 million in cash by Warwick. John and Tim used some of the proceeds to buy out the Fairfax stake in Rural Press, with a bunch of suburban newspapers, most of which were folded into Marinya Media. It went on to float Rural Press in 1989, capitalised at A$200 million. This week, it's worth A$3 billion with Marinya controlling 51.7 per cent.
So what started out with a A$20 million investment 19 years ago has turned into a goldmine and for John B, very close to control of the old family empire. It isn't the first time he's made a tilt for his family heirloom, however. Back in 1991, John B teamed up with Tony O'Reilly's Australian Independent News to bid for Fairfax, which ultimately failed. The ties between the Australian and Irish media families are still there, however, with John B remaining a shareholder in Cameron O'Reilly's private group, Bayard Capital. For his part, Cameron O'Reilly was full of praise this week, saying what John B had done with Rural Press was "by any measure an extraordinary performance".
What happens now, though, is anyone's guess. Already there is conjecture that John B will ultimately end up as chairman of Fairfax Media and move to a 15 per cent shareholding and effective control of the company - under the current merger plan, John B will end up with 13 per cent of the company via Marinya Media's stake. Asked on Wednesday at the announcement of the deal whether he would move to a controlling interest, he said the issue was "in limbo".
"I see it as a friendly investment but the point is we would have a look at it over time and see how it's performing and gauge what to do then. This is not a matter of going back to the old company, as it's now a modern company. There's hardly anyone there I know so it's quite different, so we look at it as going forward in a new era."
And of course, the rapid arrival of media moguls Rupert Murdoch and Kerry Stokes on to the Fairfax share registry in recent months - roughly 7 per cent and 3 per cent, respectively - now must be seen in a very different light. Their plans, if they had any, for a takeover now become a much bigger job, although still possible.
As most analysts now acknowledge, Fairfax is quickly migrating from hunted to hunter when the new media ownership rules are proclaimed early next year.
As for David Kirk, well, he's ended up on top of Rural Press's chief executive and market darling, Brian McCarthy, a relentless cost cutter and to his critics, a threat to quality journalism. McCarthy will be deputy CEO of the company with control of all the Australian print interests while Kirk retains the title of CEO with direct responsibility for Fairfax Media's New Zealand assets, Fairfax Digital, Fairfax Business Media and Trade Me. The view forming among Australian investors is that Kirk will take on a more strategic, visionary role while the hard-driving McCarthy heads the operational responsibilities.
Finally, though, the latest media deal puts yet more egg on the face of the federal Communications Minister, Senator Helen Coonan. Her legacy will be a claim this year that the relaxation of media ownership rules she engineered would not result in a "media frenzy". Oh so wrong.
