The battle for Fairfax Media and its lucrative property portal Domain took another interesting turn yesterday after a second US private equity player entered the fray with a rival and slightly higher offer.
The latest bidder is San Francisco-based Hellman & Friedman (H&F) which has offered between $1.225 and $1.250 per share for 100 per cent of the company. This compares with a revised bid from the rival consortium led by TPG of $1.20 per share.
And H&F has more than just a price advantage – former Fairfax chairman and Packer executive Brian Powers is spearheading its bid.
Fairfax has now officially acknowledged the possibility of a full sell-off after TPG gave up its initial plans for a carve-up of assets that would have seen it acquire just Domain and the group’s three leading newspapers.
Domain is undoubtedly the key attraction for potential bidders, with a very healthy and growing revenue stream that is has been helping to offset ongoing losses in the newspaper businesses.
Fairfax chairman Nick Falloon said in an announcement yesterday Fairfax would open its books for both parties.
“We have carefully considered the indicative proposals and believe it is in the best interests of shareholders to grant both parties due diligence to explore whether a potential whole of company proposal is available.’’
But he added there was no certainly either of the proposals would ultimately result in an acceptable offer or what the terms of any offer might be.
Meanwhile, he said Fairfax would push ahead during the due diligence period with preparations for its previously announced plans to separate and publicly list Domain in case the takeover bids fail.
While shareholders might be welcoming the competitive possibilities, the new bid has increased the chances of the respected media company ending up in private foreign owned hands. Both would, however, have to get Foreign Investment Review Board approval for any deal to go ahead.
Who are the rival bidders?
TPG Group is a global private equity investment firm founded in 1992 that now has more than US$74 billion of assets under management.
- It is best known in Australia for its 2006 takeover and subsequent listing of retailer Myer which proved a disaster for shareholders.
- Current and prior investments in new media, content and talent management include PropertyGuru, Rentpath, Uber, Airbnb, Creative Artists Agency, TES Global and STX Entertainment
- It has partnered in the Fairfax bid with Ontario Teachers’ Pension Plan Board which has previously invested in Sydney Airport, Sydney Desalination Plant and Nextgen Group.
Hellman and Friedman (H&F) is a global private equity firm founded in San Francisco in 1984 with operations in San Francisco, New York and London
- It manages more than US$35 billion in assets across eight funds.
- Its current and prior investments in various media and digital classifieds markets include Scout24 AG, Advanstar, Axel Springer, Digitas, DoubleClick, Eller Media, Formula One, Getty Images, Internet Brands, National Radio Partners, ProSieben Sat.1 AG and Young & Rubicam Asia.