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TPG consortium faces competition for Fairfax Media
Posted on Thursday, 18 May 2017 12:44
Australian newspaper publisher Fairfax Media could be the subject of a bidding war after US private equity investor Hellman & Friedman entered the fray by submitting an approach for the business.

The potential acquiror has offered to buy the company for between AUD 1.225 and AUD 1.25 per share, thereby valuing it at AUD 2.87 billion (USD 647.32 million).

This new bid represents a premium of 40.4 per cent over Fairfax’s close of AUD 0.89 on 17th May, the last trading day prior to the deal being announced.

However, if Hellman & Friedman is hoping to buy the business it will most likely have a fight on its hands; a consortium of TPG Capital and the Ontario Teachers’ Pension Plan Board have already lodged an approach of their own.

Early last week the pair made an unsolicited non-binding proposal at AUD 0.95 per share, which was subsequently increased to AUD 1.20 per share on 15th May.

Under these terms Fairfax can be valued at AUD 2.76 billion.

For its part, the target has stated it will allow both potential acquirors to conduct due diligence with a view to reaching a deal, saying this course of action is in the best interests of shareholders.

Fairfax cautioned that there is no guarantee of an agreement being signed with either party.

This is not the first time this week that a newspaper publisher has been targeted; on Tuesday Tronc announced the signing of a letter of intent to acquire Wrapports, which is known for its Chicago Sun-Times publication.

No financial details of the transaction were disclosed.

Fairfax describes itself as a leading multi-platform media company; its operations span newspapers, websites, radio stations, events and digital ventures.

The company’s portfolio includes publications like the Sydney Morning Herald and the Australian Financial Review, as well as more niche volumes such as New Zealand Fishing News and Cuisine.

Revenue for the six months to December 2016 stood at AUD 913.00 million, marking a 4.7 per cent decline on the corresponding timeframe in 2015.

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