2nd U.S. FIRM BIDS FOR FAIRFAX
Hellman & Friedman offers as much as A$2.87b for Aussie media company
AUSTRALIA’S oldest newspaper publisher Fairfax Media Ltd yesterday said it has received a takeover bid worth as much as A$2.87 billion ($2.13 billion) from a second United States private equity firm, sending its shares sharply higher.
The surprise offer from buyout firm Hellman & Friedman values Fairfax at A$1.225 to A$1.25 a share, compared to an earlier offer from TPG Capital Management and Ontario Teachers’ Pension Plan Board of A$1.20 a share.
Investors welcomed the prospect of a bidding war for the publisher of the Sydney Morning Herald and the Australian Financial Review newspapers, although lawmakers have expressed concern over the possible impact on local journalism.
“It is always good that there is a bit more competitive tension,” said Suhas Nayak, a portfolio manager at Allan Gray, which holds Fairfax shares.
Fairfax shares leapt 6.7 per cent to A$1.24 by mid-session on Thursday, in line with Hellman’s indicative offer range. The broader share market was down 1.2 per cent.
The publisher said it would allow both suitors to conduct due diligence “to explore whether a potential whole of company proposal is available”.
The chairman emeritus of Hellman, Brian Powers, was the chairman of Fairfax from 1999 to 2002.
TPG said it welcomed the opportunity to conduct due diligencebut declined to comment on the Hellman bid.
Analysts expect any private equity buyer to keep Domain and metropolitan mastheads and dump non-core regional news, radio and streaming video businesses, raising fears for the future of public interest journalism in a market already dominated by a handful of media proprietors.
Fairfax Media, the publisher of the Sydney Morning Herald, saw shares leap to A$1.24 yesterday in line with Hellman’s indicative offer range.