Fairfax Media reveals details of TPG takeover proposal
Fairfax Media has revealed details of the takeover proposal for the company which emerged over the weekend.
In an update to the ASX, Fairfax said that on Friday night it received an “unsolicited, preliminary, non-binding indication of interest” from a consortium including TPG Group and Ontario Teachers’ Pension Plan Board.
The deal would see the TPG consortium take over Fairfax and keep its metro mastheads, Domain and its events business.
The suggestion that TPG’s proposal is problematic because of separation issues is ludicrous. By far the most problematic separation is the Domain “float”, which TPGs proposal correctly ignores.
Fairfax as usual winds up Peter Cox as its mouthpiece. A man who has zero experience in newspapers and digital media.
Tempting to think that this is a wrestle between Hywood and catalano, the former besties.
interesting that TPG (and others including, I”m guessing, Catalano) consider the Fairfax mastheads to be critical marketing and distribution channels for Domain. AM pretty sure that while REA derives some benefit from the News Corp mastheads, they are nowhere near as dependent on them as Domain is on the Fairfax metro mastheads for traffic and distribution.
Interesting that James Chessell is the bearer of Fairfax announcement in today’s SMH. London-based, he must have excellent time management. Or a direct line to Sue Cato.
Today’s reporting peeks back a layer. The SMH reports that catalano favours the tpg deal over the Hywood float of Domain. The Oz reports that Domain would lose “contra” advertising if it separated from mastheads.
So it seems that Domain is subsidised by the mastheads. Which is why a “float” is opposed and why catalano likes the tpg plan.
Who’d have thought?
Yes the fantastic element of the whole Domain IPO proposal has always been the failure to address what the cash flows between the spin-off and remainder Fairfax would look like.
If the mastheads were properly remunerated for their distribution and promotional role (both print and digital), what would happen to Domain’s valuation?
TPG have clearly decided these huge separation issues make the proposed Domain IPO uninvestible.
More than promotion it appears. More like shared inventory. A direct subsidy from the masthead business to the Domain p&l. Explains much.
James Chessell has cracked it open.
Hywood vs Catalano. Both exactly the same creatures, professionally and personally.
Won’t be breaking bread for a long time….
Catalano has a new bestie, Mr Thickens.