Bidding War For Fairfax Underway As New Buyer Makes $3 Billion Counter Offer

Bidding War For Fairfax Underway As New Buyer Makes $3 Billion Counter Offer

Fairfax’s on-again/off-again takeover by a US private equity firm has taken an unexpected turn today with a new bidder apparently showing interest in the publishing business.

B&T Magazine
Posted by B&T Magazine

Fairfax has today announced that the San Francisco-based private equity firm Hellman & Friedman has offered to buy 100 per cent of Fairfax for a reported $3 billion – that’s about $250 million more than what had been offered by the original suitor, the private equity firm TPG.

Hellman & Friedman are reportedly well established in the media game and own such brands as marketing and communications firm Young & Rubicam, Eller Media and Internet Brands. It had previously owned one of Germany’s biggest publishers Axel Springer, the publisher of German newspapers Die Welt and Bild, but has since sold those assets.

Fairfax Media is reporting that the board will consider both offers – although the latest one does look the more attractive of the two – and has said it will open its books to both bidders so they could conduct due diligence and establish if an acceptable deal could be agreed on. You would also expect TPG to make another counter offer following today’s news.

Yesterday, at a senate committee hearing into the future of journalism, politicians aired their concerns about foreign buyers buying Australian media assets and, then very probably, stripping them and selling them.

As The Australian Financial Review’s James Thomson noted in his opinion piece today: “That Fairfax has a second foreign suitor might not please some politicians, given Labor’s grandstander in chief, Sam Dastyari, was so keen on Wednesday to have Treasurer Scott Morrison impose conditions on a foreign bid for the company.

“But two bids should give the politicians something to work with too. Which company will make the biggest promises to safeguard journalistic independence and quality? Or even jobs?

“Barbarians at the front gate and the back gate mean Fairfax is well and truly in play. But if this situation is exploited as it should be, it should also mean a better deal can be struck for investors and the broader community,” Thomson wrote.