Fairfax Media and Macquarie Radio close in on $200 million merger

Fairfax Media and John Singleton's Macquarie Radio network are days away from finalising a $200 million talkback radio merger less than a year after talks collapsed in bitter circumstances.

The merger, which is not yet complete but is due to be signed off before Christmas, would create an entity that would own both Macquarie Radio's 2GB, the home of top-rated Sydney shock jocks Alan Jones and Ray Hadley, and Fairfax's top-rated Melbourne station 3AW.

2GB's main value rests with the two star announcers and it is believed that a deal would not proceed if they were not retained within the wider group. Earlier this month Mr Jones re-signed with 2GB until 2017.

The importance of key talent to the performance of radio companies was underlined this year when rival media group Southern Cross Austereo suffered a ratings and share price slump after its top-rated 2DayFM Sydney breakfast duo Kyle & Jackie defected to rival KiiS FM, owned by APN News & Media.

Speculation suggests 2GB would continue to compete side by side with Fairfax's Sydney station 2UE although it is expected that 2GB's sister station 2CH would have to be disposed.

The joint-venture will control leading talkback stations in all the mainland capital cities except Adelaide – a stronger proposition to sell to advertisers – with earnings before interest, tax, depreciation and amortisation of $24.3 million.

Mr Hadley declined to comment on the potential deal when contacted by Fairfax Media but said: "I'm contracted till 2020 to Macquarie Radio Network and nothing has changed. I work for Macquarie Radio and report to [executive chairman] Russell Tate and [major shareholder] John Singleton. I don't see that changing based on the story that has been published today." Fairfax Media broke news of the imminent merger online on Thursday at lunchtime.

It is believed Mr Hadley would be free to continue to write his column with The Daily Telegraph, the Sydney tabloid newspaper owned by Fairfax's rival News Corp and there is speculation that the radio assets would be held outside of the Fairfax Media group operations.

Mr Jones did not respond to a request for comment before deadline. Mr Singleton was unavailable for comment and Mr Tate declined to comment.

It is believed that Mr Tate would retain his current role at the merged entity with Fairfax"s radio chief Adam Lang taking a very senior position and a succession plan in place.

Fairfax, which is expected to have the larger shareholding in the merged entity, declined to comment. In separate statements to the ASX on Thursday evening both companies said discussions were "ongoing" and that they were in compliance with ASX listing rules and would "keep the market informed as required".

Industry speculation suggests that savings will be sought in advertising sales and in newsrooms.

The last talks between the two sides collapsed in February.

This story Fairfax Media and Macquarie Radio close in on $200 million merger first appeared on The Sydney Morning Herald.