Fairfax has received a bid from global private equity firm Hellman and Friedman (H&F), which is more than topped TPG Capital's bid.
The new bid values Fairfax at $3 billion, higher than the revised $2.76 billion proposal made by TPG on Monday.
The publisher’s board has said it will allow both H&F and TPG to carry out due diligence, with the two private equity firms entering a possible bidding war.
H&F, based in San Francisco and New York, has interests in several businesses, including the Formula One.
Fairfax chairman Nick Falloon told shareholders the company will continue to split out Domain from the core business, adding no action needs to be taken at this stage.
“The Fairfax board appreciates the support shareholders have demonstrated for Fairfax’s current strategy and the potential separation of the Domain Group,” he said in a statement.
Yesterday, during the senate inquiry into the Australian journalism, senators invited TPG to talk about how it would manage Fairfax, due to concerns over the future of its newspaper mastheads.
The committee heard evidence from across the media industry, including Fairfax chief executive Greg Hywood, the journalists union, the Media, Entertainment & Arts Alliance and others.
Hywood was asked about the TPG bid by the committee.
"This is something I cannot talk about, this is an issue that is in front of the board at the moment, and is obviously a live issue," he said.
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