Fairfax Radio Network Transactions

22 December 2014

Fairfax Media Limited [ASX:FXJ] (Fairfax) today announced that it would merge its Fairfax Radio Network (FRN) (excluding 96FM) with Macquarie Radio Network Limited [ASX:MRN] (MRN), resulting in Fairfax receiving approximately $18 million of cash following completion and a 54.5% shareholding in an enlarged MRN, which will remain a listed entity.


The merger is expected to unlock significant value. Fairfax will be the majority shareholder in a stronger national radio network, including the leading News, Talk and Sport stations in Sydney and Melbourne.

The merger remains subject to MRN shareholder and regulatory approval and satisfaction of other customary conditions.

Fairfax has at the same time also entered into an agreement to sell its Perth-based 96FM to APN News & Media Limited [ASX, NZX:APN] (APN) for cash consideration of approximately $78 million.

The two transactions once completed will result in Fairfax receiving approximately $96 million of cash in total.

FRN/MRN Merger
Fairfax and MRN have entered into a merger implementation agreement (MIA) to consolidate FRN and MRN. MRN will acquire 100% of the shares of FRN. The transaction will result in Fairfax receiving shares in MRN and an equalising cash payment based on the prospective debt positions of FRN and MRN. On completion of the transaction Fairfax will own 54.5% of MRN with existing MRN shareholders owning 45.5%. The transaction does not include FRN’s 96FM (Perth).

The transaction will consolidate the operations of FRN/MRN metropolitan talk and music stations across Australia, including 2GB and 2UE in Sydney, 3AW and Magic 1278 in Melbourne, 4BC and Magic 882 in Brisbane, and 6PR in Perth. MRN will divest its 2CH station and Macquarie Regional Radio network to comply with regulatory requirements of the merger. The transaction is subject to MRN shareholder approval. The transaction is expected to be complete in March 2015.

A summary of the key terms of the MIA is attached to this announcement.

Fairfax Chief Executive Officer and Managing Director Greg Hywood said: “This is a compelling transaction for both Fairfax and MRN. The merger creates a genuine national Talk radio network that was not previously available to advertisers. The merger provides both cost and revenue synergies from enhanced network and sales opportunities that will create a more efficient and effective network for News, Talk and Sports radio along with music stations.

“The merger brings together the greatest mix of talkback talent ever assembled in a single radio network. Leading presenters engage listeners with an unprecedented quality and diversity of commentary, entertainment and sport coverage,” Mr Hywood said.

The Board of the combined entity will consist of five Directors, including MRN’s Executive Chairman and Chief Executive Officer Russell Tate as Executive Chairman, two Fairfax nominees, one further MRN nominee, and one Independent Director. 

The combined entity will be led by Mr Tate as Executive Chairman for an interim 12 month period, with FRN Managing Director Adam Lang appointed Chief Operating Officer.

Sale of 96FM to APN
Fairfax has simultaneously entered into an agreement to sell 96FM to APN for approximately $78 million. The transaction is subject to Foreign Investment Review Board approval and is expected to complete in February 2015. 

Mr Hywood said: “In considering the MRN transaction, Fairfax considered it appropriate to accept a compelling offer for our Perth music station 96FM from APN. 

“The station is a strong strategic fit with APN and we believe they are the natural owners of this station for the future.”