TPG makes fresh offer for Fairfax Media at about $2.7 billion

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A consortium led by US private equity group TPG Capital has made a new offer for Fairfax Media, offering $1.20 a share for the entire media group, valuing it at about $2.7 billion.

Earlier this month, TPG was offering to buy just part of Fairfax Media – online property classifieds business Domain and the company’s major metropolitan mastheads The Sydney Morning Herald, The Age and The Australian Financial Review. 



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Fairfax shares last traded at $1.07, but trading was suspended by the Australian Securities Exchange for one hour on Monday morning following the revised bid. Trading resumed at 11am and the shares jumped 7 per cent to $1.15. 

TPG’s initial proposal would have meant Fairfax’s New Zealand publishing division, regional and community newspapers, radio unit and 50 per cent share of video streaming joint venture Stan would become a separately listed company.

Previously, TPG was offering shareholders 95¢ cash a share for Domain and the mastheads, and one share in a new company called New Media Co, valued at between 25¢ and 30¢ a share – worth up to $1.25 a share in total. The new $1.20 cash offer is at the lower end of TPG’s initial proposal, but requires no structural changes. 

The Fairfax board on Monday said it was reviewing the “revised, indicative, preliminary and non-binding” proposal and would update shareholders when it had been fully assessed. 

Ontario Teachers’ Pension Plan, which has more funds under management than Australia’s Future Fund, is bidding along with TPG.

Fairfax shares were trading near the $1.05 mark before news that TPG had built a stake of just less than 5 per cent of Fairfax became public in March.

The consortium’s initial approach came as Communications Minister Mitch Fifield announced major changes to ownership regulations that will eliminate the “two out of three” and “reach” rules, which have long restricted mergers and acquisitions among Australian media companies. 

Taking Fairfax Media private would allow TPG to sell off parts of the company and possibly restructure it.

Fairfax Media announced in February that it was looking into spinning off Domain into a separate listed vehicle to address perceptions that its value was unrealised as part of the broader group.

Fairfax is in the middle of an editorial cost-cutting program at its metropolitan mastheads as it seeks $30 million in savings.

It also publishes websites in Queensland and Western Australia, including watoday.com.au and brisbanetimes.com.au, and a host of regional publications including Canberra Times, Border Mail, and Australian Senior.   

More to come



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