Private equity giant TPG drops its bid for Fairfax

File photo of the Fairfax Media offices in Sydney. Picture: Greg Wood / AFP / Getty Images

TPG has dropped its bid for Fairfax Media.

Company chairman Nick Falloon received a letter from TPG on Sunday informing him the private equity giant would not submit a binding bid for Fairfax, according to a report in The Australian Financial Review.

TPG made an indicative offer of $1.20 a share for the company in May, kicking off a due diligence period which ended on Friday. Hellman & Friedman, the other bidder which signalled its interest after the TPG bid, wrote to the company on Friday indicating it had not walked away but it, too, has failed to produce a bid at this point.

The TPG indicative offer valued the company at around $2.76 billion.

The AFR reports Fairfax is “expected to signal the end of due diligence and the sale process” in an update to the market on Monday.

In a statement, TPG said: “TPG thanks the board and senior management team of Fairfax for the integrity and focus they have brought to the discussions.

“We commend the current management for the job they are doing in managing and growing a valuable collection of traditional and new media assets.”

Fairfax, which publishes the Sydney Morning Herald and The Age, announced plans to spin out its real estate business Domain into a separately listed company. The company’s now likely to continue on this course.

TPG initially offered 95c a share for Domain and the metropolitan publishing titles and the digital ventures division which includes Weatherzone, but then extended its offer to the whole company, including the Fairfax regional publishing titles and the stake in Macquarie Radio.

There’s more at the AFR >>
Disclosure: Fairfax Media is the owner of Allure Media, Business Insider Australia’s publishing company.