Fairfax suitors drop off

Company renews bid to spin-off property portal

FAIRFAX Media will push ahead with plans to spin off its property portal Domain after two suitors withdrew takeover interests in the company.

The media group also announced its overall revenue had fallen 6 per cent in the second half of the financial year.

Unimpressed investors triggered a sharp fall in Fairfax’s shares, which were down more than 10 per cent to 98 cents — their lowest since mid-March.

Fairfax said private equity groups TPG and Hellman & Friedman had pulled out of making formal bids for the media company due to the group’s complex business model. Chairman Nick Falloon said after receiving a letter from Hellman & Friedman on Friday saying it would not make a bid for the media business, Fairfax had talked with TPG over the weekend.

“It appeared that the complication of our business was such that they (TPG) didn’t want to bid for the whole business. That’s the reading we got from that,” Mr Falloon said yesterday.

He said the company would push ahead with its original plan, made before the unsolicited takeover bids, to spin off its property classifieds business Domain into a separate ASXlisted entity.

The spin-off, as announced in February, includes holding on to between 60 and 70 per cent of Domain.

Mr Falloon said the company has made progress with regulatory approvals and was on track to separate Domain this year, with a progress update at its full-year results on August 16.

Domain’s second-half revenue was up 10 per cent with revenue in its digital business up 22 per cent, the company said.

While revenue from the group’s print and online metro news division dropped about 12 per cent, its Australian community media business was off 11 per cent, its New Zealand media business fell by about 4 per cent and Macquarie Media was down 5 per cent.

Fairfax said it expected earnings of between $262 million and $266 million for the year to June 30, compared with $283.3 million in the prior year.

AAP