PE investors drop bids for Australia’s Fairfax
Hellman & Friedman, along with a consortium led by TPG Capital and including Ontario Teachers’ Pension Plan (OTPP), have withdrawn their bids to acquire Australia’s Fairfax Media.
According to a filing, Fairfax’s board ceased discussions with both parties after the due diligence process failed to result in a binding bid from either. The company will continue to pursue its standalone business plans, including the spinout of real estate listings business Domain Group.
Fairfax's stock opened at A$0.96 following the announcement, down from the previous day's closing price of A$1.105. As of midday on July 3, it was trading slightly up at A$0.975.
TPG and OTPP submitted a partial buyout offer in May that would have valued Fairfax at A$1.20-1.25 per share, followed by a revised bid to buy the whole company for A$1.20 per share, for a valuation of about A$2.75 billion ($2 billion). Hellman & Friedman submitted a A$2.9 billion bid, also for the whole company, several days later.
Fairfax presents a challenge for potential buyers due to the disconnect between the performance of Fairfax’s digital and traditional media assets. The former, including Domain and subscription video-on-demand unit Stan, has reported strong growth in recent years. By contrast, the Australia and New Zealand newspaper portfolios, which include The Age, The Sydney Morning Herald, and The Australian Financial Review, are struggling.
According to the most recent annual report, A$1 billion of impairment costs incurred by the newspaper division contributed to a net loss of A$883 million for the year ended June 2016, from a net profit of A$87 million the year before. Revenue dropped from A$1.87 billion to A$1.83 billion over the same period.
“The board appreciates the support that shareholders have demonstrated for Fairfax’s current strategy,” said Fairfax chairman Nick Falloon. “That support has been communicated during this process with a strong desire for Fairfax to progress the Domain separation and to continue to execute on its plans.”
TPG is currently raising its seventh pan-Asian fund, which launched earlier this year with a target of $4.5 billion. The firm’s recent activity in Australia includes the sale of Alinta Energy to Chow Tai Fook Enterprises for $3.1 billion.
More on Australasia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.