Fairfax Media has pushed the start button on the long-expected float of its Domain property business, putting its shares in a trading halt on the Australian Securities Exchange on Tuesday morning.
In the run-up to a detailed announcement on its plans, Fairfax publications has reported that it plans to sell off between 30 and 40 per cent of Domain in a stock market listing by the end of the calendar year.
The move comes one day before Fairfax is due to release its half-year results for the six months to December.
Domain has, in some senses, become the dog wagging the Fairfax tail.
Analysts have valued it at up to $3 billion, while Fairfax itself is valued at $2 billion on the stock exchange. Last year, it earned about $120 million for the group.
Analysts from investment bank Goldman Sachs expect the media group to report $139 million in earnings before interest, tax, depreciation and amortisation for the six months to December. Domain, it believes, will account for almost half, or $65 million.
Fairfax, like other newspaper companies worldwide, has been hit by the decline in revenues from print advertising and is having to continually find ways to reduce costs as print readership declines.
One mooted plan is a joint venture with another media group, like Nine Entertainment, that would enable sharing of newsroom resources and content. This would cut costs and allow the pair to offer multi-media advertising packages.
Nine and Fairfax already have the successful Stan video-streaming service joint-venture, and there has long been speculation about a further tie up when media laws allow it, the Australian Financial Review reported.
The trading halt is in place to Thursday.