Private equity has made its play:
Private equity group TPG has approached Fairfax Media about a $2.2 billion demerger of its online property classifieds business and metropolitan mastheads in a bid that will attract political scrutiny and earn a cautious reception from the company’s board.
Sources familiar with discussions, which took place in Fairfax’s boardroom, said TPG had offered to buy online real estate business Domain and the company’s three major mastheads – The Sydney Morning Herald, The Age and The Australian Financial Review – for the equivalent of 95c per share in cash.
…The possibility Fairfax’s best assets could be owned by a Texas-based investor drew a strong response from some politicians.
“The work of private equity firms was epitomised in Barbarians at the Gate, let’s hope we don’t have barbarians at the editorial desk,” said independent South Australian senator Nick Xenophon.
Mr Fifield’s office was more circumspect.
“This is a matter for the Fairfax board and its shareholders,” said a spokesman.
Domain accounts for the bulk of Fairfax’s market valuation and TPG is expected to ask the division’s CEO, Antony Catalano, to run the new business if its proposal is successful.
Sadly for Australia, it is much as expected, with much of Domain’s value embedded in its loss-leading, eyeballs-generating mastheads they cannot be parted from the cancer. That is the more important consideration than TPG being Texas-owned. Property has already largely destroyed the journalism, now that job will be completed.
I have to say, if I were TPG I’d be looking for a very swift pump and dump. The sun is setting on the Great Australian Property Bubble and the Domainfax business.
