Black moves to lift stake in Fairfax
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Your support makes all the difference.THE Telegraph, owner of the Daily Telegraph, yesterday paid pounds 16.04m in a deal that gives it the power to lift its stake in John Fairfax, the Australian newspapers group, from the current 14.7 per cent to around 18 per cent, writes Patrick Hosking.
The Telegraph paid pounds 13.76m for 26.75 million options over convertible debentures of Fairfax and promptly exercised 5 million of the options at a cost of Adollars 5m ( pounds 2.28m), lifting the aggregate outlay to pounds 16.04m.
If these debentures were converted into ordinary shares, that would lift The Telegraph's Fairfax stake by 0.6 per cent to 15.3 per cent. If it exercised the rest of the options and then converted them into ordinary shares, that would lift it to 18 per cent.
Last month the Australian government gave The Telegraph, which is chaired by Conrad Black, permission to own up to 25 per cent of Fairfax, waiving the normal limit on foreign ownership of newspapers of 15 per cent.
Fairfax, which is 10.5 per cent controlled by the tycoon Kerry Packer, is one of the biggest publishers in Australia, producing the Age of Melbourne, the Sydney Morning Herald and the Australian Financial Review.
A Telegraph spokeswoman said converting the remaining options into debentures would cost a further Adollars 21.75m. It is not clear how the deal is being financed.
The options were bought at Adollars 1.15 each from the investment bank Hellman & Friedman Capital Partners. They are exercisable at Adollars 1 each.
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