How a Newspaper Company Created $300 Million in Equity Overnight


Investors can finally put a number on Fairfax Media Ltd.’s main earnings driver, the property-listings business, which has thrived amid Australia’s real-estate boom.

Spun off from the Sydney Morning Herald publisher, Domain Holdings Australia Ltd. ended Thursday, its first day as a listed company, with a market value of A$2.12 billion ($1.6 billion). The separation, the argument goes, makes it easier to parse growth at Domain, which is no longer saddled with the newspaper business. Fairfax still owns 60 percent of Domain.

The Domain website

But how much did the trading settle matters?

Here’s the math -- Fairfax’s stake in Domain is worth A$1.27 billion and that means investors are putting a price of about A$410 million on the publishing business. The latter combined with Domain results in a A$2.53 billion valuation for a pre-separation Fairfax.

That’s about A$80 million more than what Fairfax commanded at Wednesday’s close.

(Corrects Fairfax’s ownership in second paragraph and calculations in headline, fourth paragraph in story first published Thursday.)
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