SE Asian investors buy Australian media company

SE Asian investors buy Australian media company

SYDNEY (DPA): Cashed-up Asian investors still see Australia as a bargain basement of corporate goodies with yet another national icon falling this week to a company awash with Little Dragon cash.

The company bidding A$554 million (US$443 million) for control of John Fairfax Holdings Ltd, Australia's top publishing house, may be based in New Zealand.

But a lot of the cash driving BIL comes from Southeast Asian companies like Singapore's Sembawang, Malaysia's Hong Leong and Indonesia's Salim Group.

The Camerlin consortium of seven Southeast Asian business behemoths last March paid A$500 million for a 20 percent stake in BIL. The Singapore government, through its investment arm Temasek Holdings, owns another 5.6 percent directly.

If BIL is as good as its word and is a long-term investor in Fairfax, Asian investors with scant regard for a free press may end up controlling Australia's biggest newspaper and its only business daily.

As well as publishing The Sydney Morning Herald and The Australian Financial Review, publicly listed Fairfax puts out Melbourne's The Age and is active in electronic publishing.

All Singapore's newspapers are owned by a government-linked company and in Malaysia the ruling National Front government has indirect stakes in the major broadsheets.

In Indonesia, where Liem Sioe Liong's Salim Group owns whole swathes of the economy, newspapers and magazines toe the government line or get closed down.

But champions of press freedom in Australia may not need to be alarmed at the emergence of BIL as the leading shareholder in Fairfax.

Most analysts expect the canny corporate trader will soon exit the country's most influential publisher.

BIL last year bought into New Zealand publisher Wilson and Horton only to sell out months later to Irish media mogul Tony O'Reilly.

Echoing the view of stockbrokers, News Corp. chairman Rupert Murdoch branded BIL a corporate trader out for a quick buck from Fairfax.

"I don't think Brierley has any intention of owning or controlling John Fairfax. They are market opportunists, they are not serious managers," he said.

Until last month, Murdoch held a significant stake in Fairfax, which he dumped on the open market after deciding Canberra was not going to ditch rules that restrict foreign ownership of media companies to 25 percent.

The way the market sees it, BIL is gambling that the media ownership rules will ease and that it can sell to O'Reilly or another aspiring mogul at a rich profit.

BIL protests that this reading is wrong, with BIL director Rodney Price insisting that the hold-sell scenario was "complete nonsense".

"This is a very important strategic investment," said Price, who negotiated the purchase of Canadian financier Conrad Black's stake in Fairfax.

But Ron Brierley, the founder and president of BIL, was more honest, accepting the idea that the buy was more gamble than investment.

"I think gamble is a little bit extreme - but that's the basic theme," he blurted out on national radio.