SYDNEY
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 45 per cent of Domain.
But in a way, today’s trading didn’t settle matters.
First, some math. Fairfax’s stake in Domain is worth A$954 million and that means investors are putting a price of A$723.8 million on the publishing business. The latter combined with Domain results in a A$2.85 billion valuation for a pre-separation Fairfax. That’s about A$397 million more than what Fairfax commanded at Wednesday’s close.
As one trader put it: talk about efficient markets.
