Another US-based global private equity firm has joined the bidding for Fairfax, valuing the Australasian publishing and media company at up to $2.87 billion.
Fairfax Media told the ASX it had received a competing bid from San Francisco investment firm Hellman & Friedman for a range of $1.225 to $1.25 per share, compared with the earlier proposal from TPG of $1.20 per share.
The new bid values Fairfax at between $2.82 billion and $2.87 billion. The TPG proposal equates to a value of about $2.76 billion.
[TPG initially offered 95c per share in a ‘cherry-picking’ deal for Fairfax prime asset Domain and the company’s best known mastheads – The Sydney Morning Herald, The Age and The Australian Financial Review, before earlier this week raising its bid to $1.20 a share and proposing to buy out the entire media company.]
The Fairfax board says it has considered both proposals and will invite the TPG consortium and Hellman & Friedman to conduct due diligence in order to establish if an acceptable binding transaction can be agreed.
"The Fairfax Board appreciates the support shareholders have demonstrated for Fairfax's current strategy and the potential separation of the Domain Group," says Fairfax chairman Nick Falloon.
"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’s Australian Financial Review says the company will press ahead with plans to separately list its real estate classifieds business Domain while due diligence is being undertaken. “It's understood it will take about a week for Fairfax's books to be opened to the private equity firms,” says the AFR.
TPG has previously invested in companies including Uber, Airbnb, Creative Artists Agency and PropertyGuru and currently manages more than $74 billion in assets.
Hellman & Friedman’s investments include Axel Springer, Digitas, DoubleClick, Eller Media, Formula One and Getty Images. It manages more than $35 billion in assets.