US private equity firm TPG’s $2.2 billion offer for Fairfax Media’s mastheads and Domain real estate site looks dead in the water only three days after it was announced, with reports shareholders have gone cold on any potential sale.

Over the weekend, TPG offered to buy the company’s print mastheads including The Age, Sydney Morning Herald, Brisbane Times, The Australian Financial Review and its highly prized real estate site Domain.

It has been reported that Domain is the sticking point of any potential deal and has been hugely undervalued in the TPG offer.

According to reports in Fairfax Media today, the demerger was “highly unlikely” to go ahead in its current form.

In another twist, details of TPG’s offer have been leaked to media and infer any takeover would protect journalists and quality content – ironic as Fairfax Media staff are currently on a seven-day stoppage over job cuts to editorial newsrooms.

TPG’s letter to Fairfax has been seen by journalists at rival The Australian who have reported it said: “We value the important role that Fairfax contributes to communities through its iconic mastheads, and recognise the maintenance of premium content and journalistic integrity are critical to Fairfax’s ongoing success.”

Apparently, shareholders disquiet over the offer is to do with TPG’s attempts to break-up the 176 year old business – taking the chief mastheads and Domain but leaving behind other Fairfax owned assets including its New Zealand operations, Macquarie Radio and SVOD provider Stan.

Patrick Potts, an analyst at Legg Mason Martin Currie, which owns 6.1 per cent of Fairfax told The Australian Financial Review: “The current deal basically cherry picks the best assets and Fairfax shareholders are left with assets whose value is hard to work out,” Potts said, arguing a better deal would be if TPG offered to buy the business in its entirety.

“It’s an easy thanks but no thanks,” Lee Mickelburough, head of Australian equities at Henderson Global Investors, which owns five per cent of Fairfax, told the masthead.