US private equity firms bid for Australia newspaper empire

US private equity firms bid for Australia newspaper empire

US private equity firms bid for Australia newspaper empire

In a unusual historic twist, Hellman & Friedman - which lobbed a prospective price of between $1.225 and $1.25 a share - is no ordinary bidder: It was part of Tourang - a consortium of investors including Canadian media baron Conrad Black and the late Kerry Packer, which bought Fairfax out of receivership in 1992.

That offer values Fairfax at between AU$2.82 billion ($2.10 billion) and AU$2.87 billion ($2.14 billion).

The proposals remain subject to conditions including the successful completion of due diligence and foreign investment approvals.

Meanwhile, TPG's head of Australia and New Zealand operations, Joel Thickins, has agreed to meet with the Senate Select Committee on the Future of Public Interest Journalism in a special hearing on Friday into what TPG plans to do with Fairfax should they acquire the company.

Fairfax boss Greg Hywood was criticised for refusing to disclose his salary before a parliamentary inquiry this week.

Fairfax had earlier announced that it would spin off its digital real estate business, Domain.

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The company has had several media or media-related companies inside its portfolio in the past including the B2B publisher Advanstar, a share of Axel Springer, the marketing firm Digitas, DoubleClick before its sale to Google, and The Nielsen Company. "We also have a very serious concern, which we believe is something that needs to be kept in the public spotlight very strongly, that these types of private equity firms have a track record of taking cash out of businesses and not leaving cash to fund employee entitlements".

Long-standing connections: Hellman & Friedman chairman emeritus Brian Powers in the 1990s, when he was chairman of Fairfax.

It will take a week for Fairfax's books to be opened to the private equity firms, and in the meantime, the Fairfax board advised that it will proceed with the separation of Domain Group.

While Powers will be taking an active interest in the current bid for Fairfax, the executive running the process for Hellman & Friedman is its deputy chief executive, Patrick Healy.

Angela is a writer and journalist based in Sydney, Australia.

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