media groups on lookout for possible acquisitions

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Media groups on lookout for possible acquisitions

Lisa Murray
October 9, 2006

MEDIA companies have been sizing up the market ahead of a crucial vote in Parliament this week on the Federal Government's plan to overhaul ownership rules.

News Ltd hired investment bank Goldman Sachs JBWere to prepare a report outlining potential acquisitions across the country should the changes make it through Parliament.

It is understood News, which owns The Daily Telegraph, The Australian and a swag of regional newspapers, is keen to look at potential targets in the markets in which it operates.

But the report also canvasses opportunities in other markets in which it is not involved.

Other media companies are also readying themselves for the changes. Village Roadshow has shown in recent weeks it may be a willing seller of its controlling stake in Austereo by selling down its holding from 59.5 per cent to 50.2 per cent.

John Fairfax Holdings does most of its mergers and acquisitions analysis in-house.

Stocks of media companies such as Publishing & Broadcasting Ltd, Ten Network, Fairfax and APN all surged last week in anticipation of the changes.

However, the latest posturing comes as the Government's plans to reform the $12 billion industry came under pressure on Friday. National senators Barnaby Joyce and Fiona Nash - whose votes will be vital for the package to make it through Parliament - asked for some significant changes.

They want tougher local content rules for regional radio stations, stronger powers for the media and competition regulators, and a clearer definition of what is a media "voice". (Cross and foreign media ownership restrictions are being replaced by a diversity test which ensures a minimum of five voices in metropolitan areas and four in regional ones.) The National senators also want the Government to introduce a related entities test, so that the ultimate owner of a media company is clear and acceptable.

The parliamentary debate on media reform begins today.