Fairfax Media in talks with equity firm offering to buy Domain, major newspapers

Fairfax Media has confirmed it is in talks with a private equity consortium which has offered to buy some but not all of the troubled media company.

In a letter to staff, Fairfax Media chief executive Greg Hywood said the unsolicited proposal led by private equity firm TPG was indicative and if accepted would require approval from the Foreign Investment Review Board.

“Appropriately, the Fairfax board is reviewing the indicative proposal, ” Mr Hywood said.

The TPG bid, if accepted, would require a complex breakup of the Fairfax media empire.

Mr Hywood said TPG’s proposal was to acquire the lucrative Domain real estate business and Australian Metro Media, which includes the mastheads of The Sydney Morning Herald, The Age and The Australian Financial Review.

The Domain business is regarded as the jewel in the Fairfax crown — a far cry from the days when revenue from classified advertising in newspapers were described as “rivers of gold”.

Where did Fairfax go wrong?

Fairfax’s critics say it’s not just the changing media landscape which is to blame, and accuse the company of bad management and missed opportunities.

Under the proposal, Fairfax shareholders would retain current assets in New Zealand, the regional newspapers business, its stake in the Macquarie Radio Network and a 50 per cent share in the Stan streaming venture.

The proposal would also see Fairfax shareholders retain “existing Fairfax net indebtedness”.

It comes as Fairfax Media prepares to sack as many as 125 full-time equivalent positions from its metropolitan newsrooms as part of the latest cost-cutting measures.

Fairfax management and exempt union staff are producing the newspapers after staff went on strike as a result of the cuts.

Source: Fairfax Media in talks with private equity firm offering to buy Domain, major newspapers – ABC News (Australian Broadcasting Corporation)