Published: Tue, July 04, 2017
Economy | By Melissa Porter

Fairfax inks Domain separation by close of 2017

Fairfax inks Domain separation by close of 2017

Hellman Friedman has also written to Fairfax indicating it's still interested in making an offer but has yet to submit a binding bid, according to the Fairfax-owned AFR.

"But once we received the above market indicative bids, we acted in the best interests of our shareholders and ran a process".

After opening its books to two unsolicited potential bidders for the past five weeks, Fairfax did not receive a single bid. These were the complicated way Fairfax accounts for revenues between print and online assets especially in its prized Domain business, and concerns over the lack of transparency over estate agency commissions in the P&L.

"We are making excellent progress with preparations and have progressed all of the necessary regulatory approvals to meet our timetable by the end of 2017", Fairfax CEO Greg Hywood said.

Despite carrying out due diligence for the last month, both companies failed to make binding offers, resulting in TPG's ultimate decision to pull out.

Shares in Fairfax fell 10 cents, or 8.3 per cent, to close at $1.10 last Friday.

Its other business divisions - including Australian Community, Macquarie Radio and New Zealand Media - operated at a loss during this period.

"We received a letter from HG & F saying they couldn't reach their bid on Friday, and we engaged in some conversations with TPG through Saturday and Sunday morning to explore whether there was a way of putting a bid forward", Fairfax chairman Nick Falloon said.

Falloon added: "The Fairfax board believes the company is well-positioned to deliver substantial returns for shareholders into the medium and long-term future". The takeover proposals followed years of job cuts and asset writedowns at Fairfax, whose shares had tumbled from a pre-financial-crisis high amid disruption of traditional media's revenue streams. "With media reform expected later this year, Fairfax will actively look to maximise value given the strategically important businesses we own".

Fairfax had been the subject of a bidding war between TPG Capital and private equity peer Hellman & Friedman.

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