The rationale behind Media Super and Cbus merger


by Greg Bright

Media Super, formed in 1987 as JUST Super, was a pioneer among super mergers. It merged with the entertainers and actors’ fund, the interestingly named JEST, within a couple of years of formation. It then merged with Print Super, the printers and typesetters’ fund, several years later. Gerard Noonan, the longstanding Media Super director and current chair, and a former editor of the ‘Australian Financial Review’, likes to tell a merger joke.

Noonan, who recently delayed his retirement from the fund until next year after the recently announced retirement of the fund’s chief executive, Graeme Russell, has been thinking about and discussing another merger for several years. With a generational change at the fund looming, discussions picked up a bit more pace in the past six-or-so months. He wanted to maintain the fund’s brand and its special attributes in support of the media industry. When you think about it like that, Cbus, which has been an active supporter of the construction industry since inception, even owning its own property development company, looks like a good choice. And the Cbus chief executive, David Atkin, who also announced this year that he would be moving on in September or October, is a former chief executive of JUST.

Noonan’s joke is: “The best merger partners, perhaps a four-fund merger, for Media Super, are MTAA, REI and Legal Super. That way you’d get journalists, car-sales people, real estate agents and lawyers all under the one roof – among the most distrusted professional groups in society.” Alas, he didn’t manage to pull that one off. As he knows better than most, that would have at least made a great headline.

The merger, if consummated, is expected to be similar to that of Equipsuper and Catholic Super, allowing for a level of autonomy for the junior partner while gaining from better scale in administration and investment management. Media and Cbus have not yet signed a memorandum of understanding but appear confident that formalisation and due diligence will be completed early next year. Media’s $5 billion in assets will push the combined fund to above $60 billion. In a statement Media said it had spoken to more than five funds in the past six months but wanted to retain its brand. It did not confirm the precise status of the discussions.

For Media, small investments can mean a lot to its single-industry membership base. It has a successful film industry investment fund, for instance, and has also applied funds to assist in the redevelopment of Timor Leste and recognise the history of the “Balibo Five” of Australian journalists who were murdered by the Indonesian invading force of the former East Timor in 1975. Steve Bracks, a former Victorian Premier, who is the chair of Cbus, has been a champion for Timor Leste interests for several years, including against Australia’s infamous part in negotiations over Timor oil rights, which involved phone tapping.

Note: the author was a foundation contributing employer of what became Media Super and remains a member.