New bidder emerges for Fairfax Media
Fairfax Media has opened its books to buyers after a second potential private equity buyer came forward.
United States private equity firm Hellman & Friedman made an indicative offer of about A$2.9b (NZ$3.1b) for Fairfax, topping a proposal from a consortium led by fellow American private equity firm TPG Capital which had suggested a price of just under A$2.8b.
Hellman and Friedman would pay between A$1.225 and A$1.25 for each Fairfax share, while TPG's proposal was priced at $1.20 a share.
Fairfax's New Zealand assets include Stuff, The Sunday Star Times, The Dominion Post and The Press.
Fairfax said in a statement to the Australian Securities Exchange that it had invited both suitors to conduct due diligence on the company "to determine whether an acceptable binding transaction can be agreed".
Chairman Nick Falloon said the company's board appreciated the support shareholders had shown for a plan that would see Australian real estate listings business Domain – its major asset – spun off into a separate listed entity.
But he said directors had determined granting due diligence was in the best interests of shareholders.
Hellman & Friedman has raised US$35 billion (NZ$50 billion) since it was founded in 1984 and invested in 80 companies, including market researcher Nielsen, the Nasdaq stock exchange, Getty Images and the company that runs Formula One grand prix racing.
TPG, which has assets of US$75b, is pursuing Fairfax in partnership with Canada's Ontario Teachers' Pension Plan Board.
TPG's past investments have included Continental Airlines, Burger King, disk drive company Seagate Technology and financial services firm SunGard.
Britain's Telegraph reported last year that TPG typically held on to investments for at least five years.
But Morningstar financial analyst Brian Han forecast earlier this week that if it bought Fairfax, it might quickly on-sell Fairfax NZ and some of Fairfax's other assets in Australia that it had originally intended to pass over.