Rupert Murdoch has opportunistically dumped his Fairfax Media stake, recovering virtually all of News Corp’s $390 million investment. Fairfax shares slumped 12c to $5.15 in morning trade after News Corp sold its 75 million shares at the discounted price of $5.07.

In typically un-Australian form, News Corp declined to inform the ASX of its move, so instead we had to rely on this statement from Fairfax chairman Ron Walker:

The Company has been informed by News Limited that it has sold its 75 million shares in Fairfax Media at $5.07 per share. The two companies will continue to work together, where appropriate, to strengthen the overall newspaper publishing industry in Australia.

Rupert originally paid $5.25 a share last October for its strategic 7.5% stake and then watched as Fairfax shares reached a low of $4.60 in March. The rising Australian dollar means the American company won’t have posted a loss on its investment.

Fairfax shares leapt along with other newspaper companies last week after Rupert’s audacious $US6 billion bid for Dow Jones and the jewel in its crown, The Wall Street Journal.

By selling out of Fairfax, Rupert is signaling that he believes the company is now takeover-proof following the Rural Press merger which has installed John B Fairfax and his family as the most influential shareholders with 13%.

For Rupert, the stake was always about stopping the likes of James Packer or Kerry Stokes getting hold of Fairfax and making life a lot tougher for News Ltd’s vast Australian newspaper empire.

The money will certainly come in handy for the Dow Jones bid, which is Rupert’s biggest cash offer in history.

It will be interesting to see if Fairfax management decides it can now run the Eric Ellis profile of Rupert’s wife, Wendi Deng. Media Watch is expected to run its forensic eye over the saga tonight. Fairfax really should avert any further embarrassment by running the profile next Saturday.

After all, why should some fly-by-night share trader be given special treatment when he’s prepared to dump the company like this after just seven months on the register.