Fairfax ends TPG and Hellman discussions; Domain split to go-ahead

Lindsay Bennett
By Lindsay Bennett | 3 July 2017

Fairfax Media has ceased discussions with both private equity firms TPG Capital and Hellman & Friedman.

Following the receipt of the two separate proposals this year, the Fairfax board granted both parties access to confidential due diligence to explore whether a whole company proposal was available.

However, in an announcement on the ASX this morning, the publisher says there was no certainty a proposal would result in an offer and now, as it has not received a binding offer from either party, it has “ceased discussions with both parties”.

Speaking on a shareholder call this morning, chairman Nick Falloon said the equity partners indicated neither wanted to bid for the whole company. He also said the due diligence process was "not a substantial cost" for Fairfax.

Fairfax will now follow its timeline of spinning off Domain by the end of 2017 announced in February, with Fairfax CEO Greg Hywood today saying the company is making "excellent progress" with preparations and is on track for completion by the end of 2017.

"But once we received the above market indicative bids we acted in the best interests of our shareholders and ran a process. It is common in these situations for indicative bids not to translate to binding bids," Hywood says.

Fairfax will keep a 60-70% stake in Domain.

“The Fairfax board believes the company is well positioned to continue to deliver substantial returns for shareholders into the medium and long-term future. Fairfax’s digital businesses are growing strongly and we have established plans for our traditional media businesses. With media reform expected later this year, Fairfax will actively look to maximise value given the strategically important businesses we own," Falloon says.

TPG originally made a bid for Fairfax in May, initially offering 95 cents a share and quickly increasing it to $1.20.

Rival suitor Hellman & Friedman soon followed with an offer valued at between $1.225 and $1.25 a share, valuing Fairfax at up to $2.87 billion.

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