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FAIRFAX Media (ASX: FXJ) is weighing up a $2.2 billion takeover offer from a consortium led by telco TPG (ASX: TPM), as staff at the embattled publisher continue their week-long strike over the latest round of forced redundancies.
Fairfax confirmed it is reviewing the indicative proposal which would result in the consortium taking control of Fairfax's mastheads including The Sydney Morning Herald, The Age, The Australian Financial Review and the main prize: the profitable property listings business Domain.
"The Fairfax board of directors is reviewing the indicative proposal. The Fairfax Board notes that there is no certainty that the proposal is capable of being implemented given the complexity involved in splitting the businesses," the company said in a statement to the ASX.
TPG has teamed up with Ontario Teachers' Pension Plan Board to form the consortium and if the bid is accepted it will result in a complex breakup of the Fairfax media empire.
However, the company has already indicated the 95 cents per share bid was not a done deal.
"The proposed split of businesses may not optimise shareholder value," the company says.
"There is no certainty the indicative proposal will result in an offer for Fairfax, what the terms of any offer would be, or whether there will be a recommendation by the Fairfax board.
"Regardless of any potential proposal, the Fairfax board believes that Fairfax has a very attractive future and that the company is well positioned to deliver shareholder value."
The company confirmed it is continuing to progress the announced potential separation of Domain Group which is considered the jewel in the Fairfax crown, in stark contrast to its loss-making newspapers.
Under the deal, Fairfax shareholders would retain current assets in New Zealand, the regional newspapers, its stake in the Macquarie Radio Network and a 50 per cent stake in the Stan streaming platform.
It would also be subject to regulatory approval by the Foreign Investment Review Board.
The takeover bid was announced as Fairfax Media prepares to sack as many as 125 full time positions from its metropolitan newsrooms as part of a $30 million restructure.
Staff at the Sydney Morning Herald and The Age walked off the job for a week last Wednesday in protest at the job cuts which means they will not cover the Federal Budget on Tuesday.
The deadline for voluntary redundancies is also on Tuesday.
Business News Australia
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