US firm sparks bidding war for Australia’s Fairfax Media

S Y DN E Y: Ame r i c a n investment firm Hellman & Friedman has kicked off a bidding war for Australia’s Fairfax Media by making a multi- billion- dollar offer to rival private equity company TPG Capital’s proposal , the publ ishing giant said yesterday.

Hellman & Friedman – former owners of US multimedia company Getty Images and German publ isher Axel Springer – made an offer to acquire Fairfax at A$ 1.225A$1.250 (91- 93 US cents) a share late Wednesday, the Australian firm said.

The offer is higher than TPG’s revised bid of Aus$1.20 made on Monday, and values the publisher at A$ 2.82-A$ 2.87 billion.

Both bids are for the entire firm, which includes mastheads The Sydney Morning Herald, The Age and The Australian Financial Review, the lucrative property advertising Domain Group and its events and digital business units.

“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,” Fairfax chairman Nick Falloon said in a statement.

The offers are subject to due diligence, shareholder and regulatory approvals in Australia and New Zealand.

Fairfax shares were 6.47 per cent higher at A$1.24 at midday trade.

Like its global peers, Fairfax has struggled with slumping revenues and in February said it was looking to spin off Domain as a separate entity while retaining up to 70 per cent of its shares.

Hel lman & Friedman’s chairman emeritus Brian Powers previously headed up John Fairfax Holdings Limited – Fairfax’s previous name – and billionaire James Packer’s Consolidated Press Holdings Limited and Publishing and Broadcasting Limited.

TPG’s first bid to buy out part of Fairfax came in early May just days after journalists from some of its publications walked off the job for a week in protest over hefty job cuts.

The group is the main national rival to News Corp Australia, Rupert Murdoch’s Australian empire, which is also suffering from falling revenues.

Fairfax in February reported a six per cent rise in half-year net profit to A$ 84.7 million amid cost- cutting and a strong showing by Domain. — AFP