CANBERRA, Australia (AP) — Australia's second-largest newspaper empire, Fairfax Media, announced Thursday that it has received rival takeover offers from two U.S. private equity investment firms.
The Sydney-based multimedia company said a non-binding indicative offer was received Wednesday from San Francisco-based Hellman & Friedman at a price of between AU$1.225 ($0.9138) and AU$1.250 ($0.9325) per share. That offer values Fairfax at between AU$2.82 billion ($2.10 billion) and AU$2.87 billion ($2.14 billion).
TPG Group, also based in San Francisco, made an improved offer of AU$1.20 ($0.8952) per share on Monday that values the Australian company at AU$2.76 billion ($2.06 billion).
Fairfax, which was founded in 1841, has major mastheads in The Sydney Morning Herald, The Age and The Australian Financial Review. Only News Corp. eclipses Fairfax in Australia, publishing a majority of the daily newspapers sold across the country. Fairfax is also one of two companies that dominates New Zealand's newspaper industry.
Fairfax said in a statement that its board would invite both bidders to conduct due diligence in order to establish whether an acceptable binding transaction can be agreed.
"We have carefully considered the indicative proposals and believe it is in the best interests of shareholders to grant both parties due diligence to explore whether a potential whole-of-company proposal is available," Fairfax chairman Nick Falloon said.
Fairfax shares rose almost 7 percent on the news to a six-year high of AU$1.24 ($0.925) on Thursday.
Fairfax journalists called an extraordinary weeklong strike this month over management plans to shed 115 jobs — about one quarter of its journalists — from its major Australian news rooms as a cost-cutting measure due to declining advertising revenue and falling subscriptions.