A reluctant For Sale sign went up outside The Canberra Times yesterday, metaphorically speaking.
The chairman of The Canberra Times, Kerry Stokes, said that there had been a serious approach from a potential buyer and the directors of the holding company, Resolis Pty Ptd, decided to review the newspaper’s future ownership.
The review would include the possibility of continued ownership or sale.
There were several reasons: the latest offer, a succession of offers over the years, the fact it was the only significant interest in print that the group held and that there had been very limited opportunities for expansion.
Industry sources put the value of the paper at up to $300 million.
“”The decision for this review has not been easy, but if the paper is to prosper and grown this may be what needs to happen,” Mr Stokes said.
Mr Stokes bought Federal Capital Press Pty Ltd, publisher of The Canberra Times and Chronicle and later the Valley View, nine years ago.
Before that it was owned for 18 months by Kerry Packer’s Consolidated Press which obtained after the partial break up and buy-back of the Fairfax Group by Warwick Fairfax in 1987.
Over the past nine years Mr Stokes embarked on major capital updates, including the installation of a $40 million state-of-the-art colour press.
“”The paper has been re-equipped with someof the best printing machinery and technology inthe world and is staffed by some of the best newspaper peopel inthe country.”
Industry sources say Mr Stokes has apparently made attempts at further print acquisitions inthe past, but not successfully. One of the problems has been that the Australian newspaper scene is dominated by two players and there has been nowhere to grow in the way he has wanted, and any attempt to set up competing new newspapers would be met by overwhelming force.
Mr Stokes also has a controlling interest in Channel Seven, where he has spent more time and interest recently because of the lack of opportunity to expand the print side.
The managing director, Ian Meikle, told staff yesterday that it was the success of The Canberra Times andits staff and the fact that it had state-of-the-art equipment and had made a success of Canberra Times direct that made it such a desirable assets for potential purchasers.
He expected the review to take up to three months.
“”Until then it is business as usual,” he said. “”We have readers and advertisers to serve.”
Mr Meikle pointed out that the staff were a key part of the organisation and that there had been very few, if any, staff changes after previous ownership changes.
Mr Stokes said, “”I have come to the reluctant conclusion that the ambitions of our staff and theinterests of our readers and advertisers may be better served with, perhaps a bigger newspaper group.”
Mr Stokes also has a controlling interest in the Seven Network.
Industry sources have suggested that the latest approach has come from a large media group. But other sources pointed to the possibility of a float. This could enable Mr Stokes to get a better price if the share market holds up. It would also enable a diversified ownership and for Mr Stokes himself to retain some interest. And it would enable Canberrans at large to buy shares. However, the limiting factor is size and limited opportunity for growth unless run by an existing player.
As to single owners, various names have been suggested. One is a return to the Fairfax Group which owned The Canberra Times from 1963 to 1987, but Fairfax is going through cost-cutting at present.
One of the strongest possibilities is Rural Press which is owned by John B. Fairfax. Mr Fairfax was a general manager of The Canberra Times in the late 1970s. Since the partial break-up of Fairfax, Mr Fairfax has steadily built up a rural and regional newspaper group starting with the proceeds of his share in the pre-break-up Fairfax. At the time of the break-up he had expressed interest in The Canberra Times and expressed some disappointment in not getting it. He repeated his interest in acquiring The Canberra Times less than two years ago.
Another possibility is Western Australian Newspapers, a public company with no single controller, which owns the West Australian newspaper, a morning daily.
Rupert Murdoch’s News Ltd is less likely as a buyer because the Australian Competition and Consumer Commission (in its former guise at the Trade Practices Commission) expressed strong opposition on the ground that it would breach monopoly provisions. However, the Trade Practices Act has been changed since then, and in any event the precise definition of what is the “”market” being monopolised has been elusive.
The O’Reilly group, which owns a string of Queensland provincial papers, is another possibility. Cameron O’Reilly is on the board of the National Gallery of Australia, a board which Mr Stokes chairs.
Mr Stokes is by no means forced to sell. If offers do not meet expectations, continued ownership is an option.
The new presses and computer upgrades have added considerable value. General economic conditions in Australia have improved recently as has the share market. Local conditions have been hit since the chagne of Government but there are signs of that turning around.
The strength of the paper has been its high 70 per cent home-delivery of its circulation (70,000 on Saturdays, 40,000 on other days) and Canberra Times Direct which has mroe than 70 per cent of the home-delivery market.
The Canberra Times was first published in 1926 and owned and run by the Shakespeare family until 1963.