TPG Capital aborts bid for Fairfax
Hellman & Friedman is potential sole bidder for Sydney-based publisher
MELBOURNE: TPG Capital has pulled out of the running to buy Fairfax Media Ltd, leaving US private equity firm Hellman & Friedman LLC as the potential sole bidder for the Sydney-based publisher.
TPG said it had “exited the Fairfax due-diligence process” and decided not to proceed with an offer for the company, according to an emailed statement from a TPG spokesman to Bloomberg.
TPG sent a letter to Fairfax chairman Nick Falloon yesterday to notify him the private equity group was bowing out of the bidding process, the Australian Financial Review (AFR), a Fairfax newspaper, reported earlier in the day without saying where it got the information.
Hellman & Friedman sent a letter to Fairfax’s board last Friday stating it had not walked away from the deal, although it has not put forward a binding bid, according to the AFR.
A Fairfax spokeswoman in Sydney declined to comment when contacted by telephone by Bloomberg.
Fairfax’s Australian assets include the Financial Review and Macquarie radio network as well as the Domain real-estate advertising division, the publisher’s main earnings engine. The takeover proposals followed years of job cuts and asset writedowns at Fairfax, whose shares had tumbled from a pre-financial-crisis high amid disruption of traditional media’s revenue streams.
The company was valued at as much as A$2.9bil (US$2.2bil), after Hellman offered between A$1.225 and A$1.25 a share for Fairfax in May, compared with an earlier A$1.20-a-share cash offer from a TPG consortium that included Ontario Teachers’ Pension Plan Board.
The publisher granted both private-equity suitors access to its books in May to “establish whether an acceptable binding transaction can be agreed.”
Fairfax shares have risen 24% this year, beating the broader S&P/ ASX200 index’s 1% gain. They closed 8.3% lower at A$1.10 last Friday.
The media company said in February it was considering hiving off Domain into a separately listed business after its value soared along with a five-year real-estate boom in Sydney. The unit could double in value by 2020 to as much as A$4bil, UBS Group AG said in May.
TPG, a US alternative-investment firm that oversees about US$70bil, and other owners in March agreed to sell Australian utility Alinta Energy Holdings Ltd. for more than A$4bil while the buyout firm also sold down its stake in poultry company Inghams Group Ltd. in an initial public offering last year. — Bloomberg