Focus turns to Seven and News after the Fairfax-Nine agreement

million. Kaynes said Seven should raise $ 1 billion in debt to fund a competing bid at Nine's.

Seven is the owner of the West Australian newspaper and an eponymous network of free television. The company has been linked in the media with Fairfax Media and News Corp during the past year. Seven's shares fell 3 cents, or 3.5%, to $ 0.85 on Friday.

UBS badysts said that a counter-offer for Fairfax of a media company, like Seven West Media or a private equity firm, is possible.

"After the suppression of [cross-media ownership laws] we considered the consolidation of the media sector as inevitable – the only surprise is perhaps the time it took," wrote Eric Choi, badyst.

and Hellman & Freidman, engaged in a bidding war for Fairfax last year before it derived from the Domain Real Estate portal in a vehicle listed separately.

The Fairfax-Nine transaction is subject to approval by the competition authority before it is taken. Under the proposal, unanimously approved by the board, Fairfax shareholders will receive 0.3627 nine shares and $ 0.025 in cash for each share held, which implies a premium of 21 percent at Fairfax's closing price. [1 9659002] The agreement will combine Fairfax newspapers, its interests in radio stations such as 2Go, 60% Domain and Stan's streaming video platform with the free Nine TV channel, which broadcasts National Rugby League and other popular shows. Nine CEO Hugh Marks and President Peter Costello, the former federal treasurer, will remain in these positions. Fairfax CEO Greg Hywood is expected to depart with a payment of at least $ 6 million, including options and shares accumulated for eight years in this role

M. Kaynes and Mr. Choi both expressed their opposition.

million. Kaynes said the deal was more about the Domain, the real estate portal, than Fairfax's badets.

"In our view, the transaction benefits from Nine's high valuation for acquiring a majority stake in the Growth Assets (Domain), and the logic of combining the badets of the television and newspapers is secondary", he wrote.