TPG, OTPP pull out of $2.1bn Fairfax bid

The pair have ditched plans to acquire Fairfax Media assets – real estate arm Domain, Australian Metro Media and its Events and Digital Ventures unit– after conducting due diligence.

TPG and Ontario Teachers' Pension Plan have withdrawn their A$2.76 billion ($2.1 billion; €1.9 billion) bid for Australian media group Fairfax Media, leaving San Francisco-based private equity firm Hellman & Friedman as the sole investor interested in the asset.

“TPG has today exited the Fairfax due diligence process and has elected not to proceed with an offer,” a spokesman said in a statement on Sunday.

“TPG thanks the board and senior management team of Fairfax for the integrity and focus they have brought to the discussions.”

TPG and OTPP initially offered to acquire Fairfax Media assets in May in a deal estimated to be about A$2.5 billion. The pair offered to pay A$0.95 per share for the company’s online real estate arm Domain; Australian newspapers including The Sydney Morning Herald, The Age and The Australian Financial Review; and its Events and Digital Ventures unit. The firm then revised its bid to A$1.20 per share or a total of A$2.76 billion.

Hellman & Friedman followed with an offer valued of between A$1.22 and A$1.25 a share, valuing Fairfax at up to A$2.87 billion. The firm is still interested in making an offer but has yet to submit a bid, according to local media reports.

Both firms have been carrying out due diligence on Fairfax in the past month and were given until 30 June to submit formal offers.

In a statement, Fairfax said it has “ceased discussion” with TPG and OTPP and its top priority was “investing to grow and further strengthen the Domain Group”. Fairfax chief executive Greg Hywood said the company has progressed all the necessary regulatory approvals to meet its timetable for completion of spinning out Domain from Fairfax by end-2017.