When it comes to a grouping of billionaires in Australia it couldn't get much bigger than Packer, Murdoch, Rinehart and Gordon.
In recent times this group have all been drawn towards struggling domestic media assets including Fairfax Media Limited (ASX: FXJ) and Ten Network Holdings Limited (ASX: TEN).
While Fairfax has enjoyed a rise of 27.5% over the past 12 months, the stock is still down 53.6% over the past five years.
Things have been even worse for shareholders in Australia's third free-to-air network with Ten's shares having fallen 3.6% in the past year and a whopping 82.6% over the last half decade.
Most of these billionaire investors would be sitting on losses based on the entry price of their foray into these struggling media companies.
However one of them may have got their timing right as according to a report in the Australian Financial Review, billionaire Bruce Gordon – who has made a fortune as owner of the television broadcast network WIN – recently acquired a five-million share stake in Fairfax.
News of Gordon's purchase comes in the wake of developments at Ten which suggest acquirers are circling the beaten-up stock. There are some big name U.S. media firms believed to be interested along with pay-television operator Foxtel, which is a jointly owned by News Corp (ASX: NWS) and Telstra Corporation Ltd (ASX: TLS).
Ten seems a likely candidate for a takeover given its depressed share price and the potential synergies an acquirer could bring. However a handful of billionaires including Packer, Murdoch and Rinehart would all appear to be currently underwater on their investment, which could make them reluctant sellers if a takeover premium is built into the stock price.
Valuable assets
While the profitability of many 'old world' media assets has certainly been diminished, most assets remain profitable and may in some instances have value which is not fully reflected in their current share price. In some cases, media firms have sought to realise that hidden value by spinning out certain assets such as the recent listing by APN News and Media Limited (ASX: APN) of its outdoor advertising arm into APN Outdoor Group Pty Ltd (ASX: APO).
For other companies such as Ten, a takeover seems the most likely course for a realisation of shareholder value in the near term.
