Battle Heats Up For Fairfax p.17

By: Alan Harman

U.S.-OWNED BANKERS Trust Australia has received government approval to expand its investment in the Australian newspaper group John Fairfax Holdings Ltd. to 14.99%, from 8%.
The decision came weeks after Communications Minister Richard Alston announced details of a planned review of media-ownership rules. The review is expected to recommend changes that will result in Fairfax getting new ownership.
Under current government regulations, a single foreign concern is forbidden to own more than 25% of a metropolitan newspaper company, with unrelated foreign interests allowed up to another 5%.
Bankers Trust is positioning itself to benefit from the rule change. It received approval for its increased Fairfax investment after giving assurances that its investment was not part of a move for control and that it was not acting on behalf of another party.
Those assurances were requested because Bankers Trust has acted as an adviser to Tony O'Reilly's media interests, including Independent Newspapers PLC of Ireland, an earlier, unsuccessful bidder for Fairfax.
Bankers Trust was given 12 months to boost its holding of nonvoting shares. It is restricted to 5% of voting shares.
Spokesman Stephen Mills said there was nothing unusual about the investment, that the company often had to go through the Treasury Department for permission to invest because of its U.S. parentage.
Once Bankers Trust acquires its additional equity, four major players will hold 60% of Fairfax's shares. Canadian Conrad Black's Telegraph PLC owns 25%, Kerry Packer's Publishing and Broadcasting Ltd., 15%, and Rupert Murdoch's News Corp. nearly 5%.
Publishing and Broadcasting recently repeated its desire to take over and merge with Fairfax, whose publications include the Sydney Morning Herald and Melbourne Age.