Fairfax, Macquarie to Buy Southern Star Parent Company

CANBERRA, July 5: The newspaper publisher Fairfax Media and Macquarie
Media Group (MMG) have reached a deal to buy Australia’s Southern Cross
Broadcasting, the parent company of Southern Star, for A$1.08 billion (US$924
million).

Fairfax will take control of Southern Cross’s radio stations
in Sydney, Melbourne, Brisbane and Perth; Southern Star; Satellite Music
Australia; and the Southern Cross View digital media businesses. MMG will
retain Southern Cross’s regional television operations and associated
businesses. The merged Macquarie Regional Radioworks and Southern Cross TV
entity will create Australia’s leading regionally focused media business
reaching a potential audience of approximately 7.5 million or 95 percent of
Australia’s population outside the mainland State capital cities. In addition,
MMG has conditionally agreed to acquire nine commercial radio broadcast
licenses serving five regional license areas in South Australia and Queensland
and the related narrowcast licenses serving these States, currently majority
owned by Fairfax Media.

MMG currently holds a 13.8 percent interest in Southern
Cross, which it acquired in November 2006.

Ronald Walker, the chairman of Fairfax Media, commented:
"MMG and Fairfax Media are the best placed in the media industry to
propose this acquisition, and we are the best stewards for these assets. This
proposal maximizes the value to Southern Cross shareholders."

David Kirk, CEO of Fairfax Media, added: “Our proposed
acquisition is a strategic extension for Fairfax Media into metropolitan radio
and video production. It will enhance our position across all distribution
channels. The video entertainment properties will be important drivers for the
next wave of growth in our digital businesses. Video entertainment will become
increasingly key to online businesses in the future, even as they continue to
serve television and pay-TV distribution platforms and give us an active
presence in those media.”

The directors of Southern Cross unanimously support the proposed
deal and are recommending that shareholders accept the proposal. The offer of
A$17.41 per Southern Cross share represents a 20.2-percent premium to Southern
Cross’ closing share price of A$14.49 on November 16, 2006 (the day before MMG
announced its acquisition of a stake in the company); and an 8.8-percent
premium to Southern Cross’s closing share price of A$16.00 on June 29,
2007.

The proposed acquisition is conditional on MMG receiving
approval from the Australian Communications and Media Authority (ACMA) for
temporary contraventions of the ownership and control restrictions set out in
the Broadcasting Services Amendment (Media Ownership) Act. To support the
application for ACMA approval, MMG proposes to divest 12 regional radio license
areas.

The transaction is expected to be completed in October 2007.