Private equity outfit TPG Capital has reportedly approached Fairfax Media with a proposal to buy its online real estate business Domain and the company’s three big publishing mastheads – The Sydney Morning Herald, The Age and The Australian Financial Review.
The Australian Financial Review’s Street Talk column reported the move on Sunday saying the publishing mastheads were viewed as a key part of Domain’s distribution platform.
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Street Talk reported Domain plus the three mastheads would be worth about $2.5 billion.
That would mean Fairfax’s New Zealand business, its regional and community newspapers, radio assets and 50 per cent share of online streaming network Stan would be left out of the deal.
TPG bought just under 5 per cent of Fairfax Media in March sparking speculation about its plans for the company.
Fairfax Media announced in February that it was looking into spinning Domain off into a separate listed vehicle to address perceptions that its value was unrealised as part of the broader group.
Fairfax is in the middle of a controversial editorial cost-cutting program at its metropolitan mastheads as it seeks $30 million in savings. Editorial staff went on a week-long strike starting last Wednesday.
On Friday, major international investment fund Blackrock revealed it had snapped up a 5 per cent stake in Fairfax Media.
Fairfax chairman Nick Falloon was executive chairman of Network Ten for nine years until 2010. Photo: Peter Rae
A day earlier Fairfax Media chief executive Greg Hywood told an investor conference that the Domain review was “well underway” following the appointment of Grant Samuel and was expected to be completed later this year.
Domain was enjoying price increases for listings and audience growth, he said.
“Over the past two years, total mobile visits were up 133 per cent, total app visits up 107 per cent; and app downloads grew 60 per cent,” he said.
Mr Hywood told the same conference that the publishing business was facing structural challenges and that Fairfax had cut net publishing costs by $400 million over the past five years.
“Through this entire transition our publishing businesses have remained profitable,” he said.
The federal government over the weekend announced reform of the country’s tight media ownership laws prompting predictions that the sector would see a flurry of corporate activity.
In particular the government is looking to do away with the “two-out-three” rule which prevents single ownership of tv, radio and newspapers in the same capital city market.
More to come