The ailing Fairfax Media news business will be put on the operating table on Wednesday as corporate doctors face the delicate process of removing enough of its profitable real estate listings business to keep both parts of its operations healthy.

The company suspended its shares on Tuesday and will on Wednesday announce the structure of the long anticipated selldown of the successful Domain business. Fairfax’s first-half profits will be announced at the same time.

While no official details have been released at the time of writing, market speculation has it the company will float off 30 to 40 per cent of Domain on the stock exchange.

There are a few questions Fairfax shareholders will be asking, with the most obvious being how much money will be raised? Investment bank Credit Suisse recently ran the ruler over the media group and reckoned Domain could be worth between $2 billion and $3 billion.

The bullish valuation is not going to fly as it is the most optimistic case based on a full separation of Domain. That would include a 30 per cent control premium.

Media analyst Bob Peters, of Global Media Analysis, says if you factor in a value of $2 billion or more then “Fairfax could end up with $800 million to $1 billion. The question is what would they do with that?”

“There is not much debt (about $179 million) on the balance sheet so they could buy another company which would be strange in this media environment. Or they could return capital to reward the avarice of fund managers.”

A capital return could act as a sugar hit for shareholders, pushing up the price until the cash is doled out. But media analyst Steve Allen, of Fusion Strategy said in the longer term a spinoff “could see a lift in Fairfax shares, but not a big lift; maybe 5 per cent.”

Domain, which includes both online and print listings, has become the property tail that is wagging the Fairfax dog. Analysts expect it to earn almost half, or $65 million, of the $139 million in pre-tax earnings tipped to be announced Wednesday.

Its earnings growth last year was 40 per cent and its expected to be up another 12 per cent this year while newspaper revenues are on the slide. Circulation figures explain why and they feed into slumping advertising revenues.

So bad is the newspaper business that Credit Suisse at it bleakest thinks it might have a negative value of $200 million. So managing the booming Domain is vital if the company has a future.

Selling the stake down would not only allow Fairfax to pay off debt, “it would put a market valuation on Domain”, Mr Peters said. That would give a clearer view on the value of Fairfax.

Prior to the suspension, Fairfax as a whole was valued at $2 billion. Given Domain is worth at least that, investors are saying the rest is worth nothing, which is overly gloomy.

The Domain tail has been wagging the Fairfax dog. Photo: AAP

“A Domain selldown would give the company breathing space to to make other critical decisions,” Mr Allen said.

Other options include extending the joint venture with Nine Network on the Stan video streaming business to sharing news rooms to allow both companies to cut costs as the market has been widely tipping.

All newspapers companies are facing similar issues but in Australia “News Corp and Fairfax are taking diametrically opposed strategies,” Mr Allen said.

“News believes print can be maintained and is resisting migrating revenues to online where it can, while Fairfax is going digital first,” Mr Allen said.

But  the end point appears to be the same. “Robert Thomson (News CEO) basically said the Australian print business is not profitable,” Mr Allen said.

Fairfax weekday print editions would probably last another three years before giving way to digital, he said.