TPG, OTPP Offer $2B In Second Fairfax Bid

Updated on

A consortium led by TPG and the Ontario Teachers’ Pension Plan has submitted a revised bid of A$1.20 per share, or about A$2.7 billion (about $2 billion) in cash, for Australia’s Fairfax Media (ASX: FXJ). The offer arrived before the company’s board even had a chance to make a decision on the group’s initial takeover bid from last week, a A$0.95 per-share offer, representing about A$2.2 billion in value.


While the revised proposal represents a lower overall valuation of Fairfax than the original, per the Fairfax-owned Australian Financial Review, TPG is now proposing to purchase the entire Fairfax empire, rather than just pieces of it. Originally, the investor group planned to leave the company’s New Zealand publishing division, regional and community newspapers, radio group and 50% of joint streaming venture Stan to Fairfax’s shareholders as a separately listed company.

Earlier this year, Fairfax announced plans to sell online real estate assets provider Domain, which is worth a reported A$2.2 billion. That would seem a natural pairing for TPG, which already owns part of Singapore’s Property Guru and Rentpath, a US company that helps consumers find apartments and houses for rent.

However, any deal for Fairfax would have to gain approval from Australia’s Foreign Investment Review Board. Should the deal be approved, TPG reportedly plans to sell the assets it didn’t originally want and retain only the shiniest jewels in Fairfax’s crown, namely Domain and publications The Australian Financial Review, The Sydney Morning Herald and The Age.

That could further disrupt an Australian media landscape that is struggling to compete in a digital advertising marketplace dominated by Google and Facebook. Earlier this month, staffers at The Sydney Morning Herald and The Age went on a week-long strike to protest job cuts aimed at saving A$30 million from the company’s budget. Workers returned last week, but handed down a vote of no confidence in Fairfax CEO Greg Hywood after it was revealed he made roughly $7.2 million in salary last year.

It’s no secret that media companies are struggling to deal with the loss of print advertising revenue. And it ‘s fair to wonder if those struggles are giving pause to potential investors: PE investment in the publishing sector has been on the decline worldwide since 2014, when there were 75 deals completed in the space, per the PitchBook Platform.

Interested in PE investment activity in publishing? PitchBook subscribers can take a closer look.

Article by Adam Lewis, PitchBook

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