The house of Fairfax looks set to be divided, with the long mooted spin-off of Fairfax Media's real estate business Domain gathering pace.
As revealed by Street Talk on Monday, the media giant is seriously considering spinning off Domain into a separately listed vehicle to be run by current Domain boss Antony Catalano.
While a formal decision is yet to be made, Street Talk understands that Macquarie Capital is advising Fairfax.
It comes as Fairfax, which publishes The Australian Financial Review, prepares to hand down its financial results for the six months to December 31 on Wednesday.
Domain is expected to be a key feature at the results announcement.
A Fairfax spokesman declined to comment.
Sources said there was a view among key Fairfax decision makers that "the time was right" to enact the long-speculated spin off plans. Media industry consolidation is firmly on the radar for 2017 regardless of whether there is a change in ownership laws.
Fairfax is understood to be targeting a deal for Domain before the end of the year.
Domain has been the shining light within Fairfax for much of the past decade, growing to earn about $130 million a year for the publishing company.
Analysts expect Domain to be worth about $2 billion as a separately listed entity.
Investor and analyst attention is expected to be firmly on Domain on Wednesday, when Fairfax chief executive Greg Hywood fronts the market with his company's half-year numbers.
Goldman Sachs told clients on Monday morning that it was "all eyes on Domain" with particular focus on any pushback from agents on price rises introduced in January and any planned product launches.
Goldman Sachs analysts expect Fairfax to report $139 million in earnings before interest, tax, depreciation and amortisation for the six-months to December 31, with Domain accounting for almost half or $65 million.
Fairfax is no stranger to spinning off digital companies. Fairfax sold half of its stake in New Zealand classifieds business Trade Me via an initial public offering in 2011, before selling out of completely in 2012.
The future of the two metropolitan newspapers print editions has been under something of a cloud, although the recent restructuring of the metro publishing division's management structure and team has been designed to ensure that the physical newspaper will remain on the stands for at least a few more years.
But it seems likely Fairfax will continue to have to reduce costs as print readership declines.
As such, one idea is to establish a joint venture with another media company such as Nine Entertainment that could see the two companies share newsroom resources and content.
This could help reduce costs and would allow the pair to offer multimedia advertising packages.
Nine and Fairfax already have a joint venture with the successful video streaming service, Stan, and there has long been speculation about a further tie up as part of the broader debate about media ownership laws.
