Morgan BellFairfax Buys Rural Press
December 6th 2006 11:16
Rural Press is being merged with Fairfax Media. Rural Press is a great, growing company with interests in Australia, New Zealand and the US. Stay with me for more.
The news today, 6 December 2006, is that “Fairfax Media has announced a takeover of Rural Press which will create a combined company with assets worth more than $9 billion.”
“The takeover will create Australia’s largest integrated metropolitan, regional and rural print and digital media business, the companies said in a joint statement to the Stock Exchange this morning.”
“The proposed transaction has been unanimously recommended by the Rural Press board in the absence of a superior proposal.”
““We [Fairfax chairman Ron Walker] are looking at a scenario where Fairfax just got more expensive (for predators) and a break-up of Fairfax got a little bit more problematic because one of the obvious buyers of some of the assets was Rural Press,” he said.”
“Under the proposal, each Rural Press ordinary and preferred shareholder will be entitled to receive, for each share held, two Fairfax shares and $3.30 in cash, or 2.3 Fairfax shares and $1.80 in cash.”
“In addition, the Rural Press board said it intends to declare a fully franked special dividend of 57.143 cents per ordinary share, and 62.858 cents per preferred share.”
“The offer, which will be voted by Rural Press shareholders, represents a premium of around 15 per cent on the company’s current share price of $11.75. The deal does not have to be approved by Fairfax shareholders.”
This news was published in the online version of the Sydney Morning Herald under the title “Fairfax takes over Rural Press” and was written by Colin Kruger and Lisa Murray. Click here to open that page: smh.com.au.
Rural Press (ASX: RUP) is a fascinating company with a niche business.
It owns 160 regional newspapers, 50 agricultural publications, six radio stations and 16 web-fed printing sites throughout Australia. Its operations span Australia, New Zealand and the USA.
Its EPS grew in the last six years by an annual 24 per cent compounded to 58.9 cents. Its sales grew by 19 per cent compounded for the same period, despite a downturn in rural activity.
RUP’s Net Profit is $65 million on a margin of 11 per cent. Its Return on Equity is 15.4 per cent, which is very good.
RUP’s prospects for growth are great: it can expand, as it has been doing for a few years back, through the US and it has the cash flow to do so (121.4 cents per share).
These figures are based on data available at: money.ninemsn.com.au.
RUP’s price, though, is not cheap. It trades at $13.41, a P/E of 22.8 times. Interestingly, that’s just the price Fairfax is prepared to pay, according to the information above.
Fairfax seems to need to grow in size in order to become less attractive to predators, but you must not lose sight of the fact that your return on an investment depends on the price you pay.
End
The news today, 6 December 2006, is that “Fairfax Media has announced a takeover of Rural Press which will create a combined company with assets worth more than $9 billion.”
“The takeover will create Australia’s largest integrated metropolitan, regional and rural print and digital media business, the companies said in a joint statement to the Stock Exchange this morning.”
“The proposed transaction has been unanimously recommended by the Rural Press board in the absence of a superior proposal.”
““We [Fairfax chairman Ron Walker] are looking at a scenario where Fairfax just got more expensive (for predators) and a break-up of Fairfax got a little bit more problematic because one of the obvious buyers of some of the assets was Rural Press,” he said.”
“Under the proposal, each Rural Press ordinary and preferred shareholder will be entitled to receive, for each share held, two Fairfax shares and $3.30 in cash, or 2.3 Fairfax shares and $1.80 in cash.”
“In addition, the Rural Press board said it intends to declare a fully franked special dividend of 57.143 cents per ordinary share, and 62.858 cents per preferred share.”
“The offer, which will be voted by Rural Press shareholders, represents a premium of around 15 per cent on the company’s current share price of $11.75. The deal does not have to be approved by Fairfax shareholders.”
This news was published in the online version of the Sydney Morning Herald under the title “Fairfax takes over Rural Press” and was written by Colin Kruger and Lisa Murray. Click here to open that page: smh.com.au.
Rural Press (ASX: RUP) is a fascinating company with a niche business.
It owns 160 regional newspapers, 50 agricultural publications, six radio stations and 16 web-fed printing sites throughout Australia. Its operations span Australia, New Zealand and the USA.
Its EPS grew in the last six years by an annual 24 per cent compounded to 58.9 cents. Its sales grew by 19 per cent compounded for the same period, despite a downturn in rural activity.
RUP’s Net Profit is $65 million on a margin of 11 per cent. Its Return on Equity is 15.4 per cent, which is very good.
RUP’s prospects for growth are great: it can expand, as it has been doing for a few years back, through the US and it has the cash flow to do so (121.4 cents per share).
These figures are based on data available at: money.ninemsn.com.au.
RUP’s price, though, is not cheap. It trades at $13.41, a P/E of 22.8 times. Interestingly, that’s just the price Fairfax is prepared to pay, according to the information above.
Fairfax seems to need to grow in size in order to become less attractive to predators, but you must not lose sight of the fact that your return on an investment depends on the price you pay.
End
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