Fairfax/MRN merger talks collapse
A Fairfax Radio merger with the Macquarie Radio Network (MRN) is now off the table again.
Talks have collapsed because 2GB (MRN) stars Alan Jones and Ray Hadley were not prepared to be part of the deal; this was apparently a key factor of any possible merger.
The reason for their reluctance is that a merger would have been a joint venture managed by Fairfax; last year Macquarie had agreed that Fairfax should hold a majority stake, and operate the joint venture.
Given Macquarie operates 2 metropolitan stations, and Fairfax operates 7 stations, this was an understandable concession.
However, it was not acceptable to Jones and Hadley, who were not prepared to fall under the control of Fairfax, and despite last minute efforts to structure a deal that worked for them, negotiations have now collapsed.
The Fairfax/Macquarie merger would have resulted in a powerful national commercial talk network; spearheaded by 2GB Sydney and 3AW Melbourne, along with 4BC Brisbane and 6PR Perth.
The new company would continue to represent, for the purpose of national sales, dmg station FiveAA in Adelaide, making it effectively a national talk network, supported by a number of music stations; Magic Melbourne and Brisbane, 2CH Sydney and 96FM Perth.
Analysts told the SMH that a merged entity could have also saved between $5m and $10m in costs and that earnings could have been boosted by about $4 million through a sale of 2UE.
Only last week Gina Rinehart, through her representative John Klepec, told Fairfax (here) that they wanted the deal done and told Fairfax that they were "moving at glacial speed' when considering options to maximise shareholder value.
However for now, the merger is now off the table, for the second time. Watch this space.
Read more in the Sydney Morning Herald.