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Magazine print shake up follows government media overhaul

Thursday, 19 October 2006
By Print21
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The Federal Government’s overturning of restrictions on foreign and cross-media ownership is precipitating the biggest ownership shakeup ever of the magazine sector across Australian and New Zealand. The estimated 3.2 billion copies across 150 titles produced annually by Australian magazine publishers are attracting unprecedented attention from private equity investors keen to leverage the freedom to cross promote.

Media mogul James Packer has positioned himself to take full advantage of the new media laws by entering a $4.5 billion deal with private equity group CVC Asia Pacific that will see him sell half of Publishing & Broadcasting Ltd (PBL), which contains APC Magazines as well as the Nine network and other ‘new media’ assets like ninemsn and carsales.com.au.

The deal will see the formation of PBL Media, the largest diversified media group in Australia. ACP Magazines along with the other media interests will be transferred over to the new company with PBL and CVC Asia Pacific each having a 50 per cent stake, enabling PBL Media to take advantage of local and international media opportunities.

PBL is by far the largest magazine publisher in the region with 44 titles, including circulation leader Australian Woman’s Weekly (circ. 610, 408). Under the late Kerry Packer it sold out of printing many years ago preferring to buy its print at home and abroad. The company has enjoyed is role as the ‘make or break’ print buyer in the heatset web sector, setting prices and shifting its printing with equanimity. Following the Hannan family’s entry into magazine publishing with its FPC stable, PBL further dispersed its major accounts across a number of new entrants including Blue Star and Times Argyle. Arguably its dominance in the marketplace has kept a lid on prices often reducing magazine printing to line ball profitability.

Meanwhile the Hannan’s IMPG Group, which also owns Craft Printing, Offset Alpine, Inprint and Hannan Printing among others, is involved in its own sell-off of its FPC stable of magazines to take advantage of the high prices on offer following the media laws shake up. While the group is playing its cards close to its chest, PBL and Pacific Magazines are likely to be among the interested parties placing bids. Citigroup, the financial advisor to FPC Magazines, is said to be calling in final submissions next week with the deal expected to be closed off later in the month or early in November.

In the West, Kerry Stokes is set to become an even more powerful media mogul by taking an 8.5 per cent stake in West Australian Newspapers (WAN) valued at just under $200 million while reportedly looking to bring the figure up to 14 per cent. Already owning the largest television station in the state his move will stretch the spirit of the new laws.

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