Fairfax Media Eyeing Massive $2.5 Billion Offer From US Private Equity Firm

Fairfax Media Eyeing Massive $2.5 Billion Offer From US Private Equity Firm
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Following on from one of its more tumultuous weeks in recent times, that saw staff go on a seven-day work stoppage, comes news over the weekend that Fairfax Media is eyeing a potential $2.5 billion offer from US private equity firm TPG.

TPG, one of the world’s biggest private equity firms, already owns a considerable whack of Fairfax, after it bought five per cent of its shares in March 2016.  It also boasts interests in a number of US businesses, namely in the areas of tech, pharmaceuticals and hospitality.

Although exact details of TPG’s offer is sketchy, it’s believed the potential deal involves the purchase of Fairfax’s chief mastheads including The Sydney Morning Herald, The Age and The Australian Financial Review.

It has been reported that Fairfax’s board met over the weekend to consider TPG’s offer. However, any deal would be beholden to the approval of the ACCC and to the Foreign Investment Review Board.

Fairfax Media itself has reported that TPG’s CEO Joel Tickins is currently in Australia discussing the purchase that would result in the breakup of the 176 year old family-owned media business.

Over the weekend, Fairfax Media news sites described any potential deal as “complicated and uncertain”.

Again, what parts of Fairfax TPG has its eyes on are unclear, although the jewel in the Fairfax crown – the real estate site Domain – would definitely be included.

However, it has been reported that the private equity firm is not interested in other parts of the Fairfax business that include its New Zealand operations, its stake in Macquarie Media Radio and the SVOD JV Stan. If the deal was to go ahead, the unwanted parts of the business would reportedly merge to form their own company separate to the news mastheads and Domain site.

In an email to staff over the weekend, Fairfax CEO Greg Hywood said: “Appropriately, the Fairfax board is reviewing the indicative proposal. There is no certainty that the indicative proposal will result in an offer for Fairfax, what the terms of any offer would be, or whether there will be a recommendation by the Fairfax board.”

The news of TPG’s offer comes after the federal government finally announced its long awaited new media reforms on Saturday. However, it’s believed that news of the reforms and the news of TPG’s interests in Fairfax are purely coincidentally.

A spokesperson for the federal communications minister, Mitch Fifield, said over the weekend: “This is a matter for the Fairfax board and its shareholders,” a spokesperson was quoted in Fairfax Media.

“A proposal would also require scrutiny from the Foreign Investment Review Board and the government does not comment on prospective FIRB applications,” he said.

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