May 7 (Bloomberg) -- Rupert Murdoch's News Corp. sold its shares in Fairfax Media Ltd., six months after buying the stake to thwart any attempt to take over its nearest Australian rival.
The sale comes just days after Australian-born Murdoch bid $5 billion for Dow Jones & Co., publisher of the Wall Street Journal. News Corp. sold its 7.5 percent stake for A5.07 a share, Fairfax said in a statement today. The sale fetched about A$380 million ($313 million).
Murdoch bought the stake in October after the government loosened media ownership restrictions, allowing billionaires James Packer or Kerry Stokes to bid for Fairfax. Instead, the publisher of the Sydney Morning Herald agreed to buy regional publisher Rural Press Ltd. in a A$2.8 billion deal that closes this week.
``With Fairfax unlikely to be broken up, there's no point having a seat at the table,'' said Greg Fraser, an analyst at Shaw Stockbroking Ltd. in Sydney. With ``over $5 billion in cash on the balance sheet, this is tiny in the scheme of News Corp.''
Fairfax shares fell 14 cents, or 2.7 percent, to A$5.13 at the close of trading in Sydney, paring this year's gain to 6.2 percent.
Murdoch paid A$5.18 a share for the Fairfax stake. Since then the company has paid a dividend of 10 Australian cents a share. The Rural Press takeover would have diluted his holding to about 5 percent.
Dow Jones Bid
Murdoch said in November he bought the Fairfax stake ``just to make it difficult for anybody to take them over.'' He said he could ``quickly'' increase his stake to more than 10 percent to block any bidder from taking full control of Fairfax.
``They're obviously thinking about what they should be doing in America at the moment with Dow Jones,'' said Ross Barker, who manages the equivalent of $4.5 billion at Australian Foundation Investment Co. in Melbourne and is Fairfax's 10-biggest shareholder.
News Corp.'s May 2 bid for Dow Jones was rejected by the controlling Bancroft family. The $60-a-share offer was a 65 percent premium to the previous day's closing price.
Buying Dow Jones would give Murdoch the Wall Street Journal - - the second-biggest selling newspaper in the U.S. -- Dow Jones Newswires and Barron's. An acquisition would add to a newspaper empire stretching from Sydney to New York to London with 170 titles including the New York Post and The Times of London.
Murdoch, 76, founded News Corp. in the Australian city of Adelaide in 1952. The company publishes 70 percent of the country's newspapers, including the top-selling Sunday Telegraph in Sydney and national daily the Australian.
To contact the reporter on this story: Miriam Steffens in Sydney at msteffens1@bloomberg.net
