Fairfax Media has confirmed it has received an unsolicited proposal to split up its assets but says the bid might not be in the best interests of shareholders.
Fairfax, which is subject to a journalists' strike in Australia, failed in its bid to merge its New Zealand assets with those of NZME, the publisher of The New Zealand Herald.
On the same day the bid was declined by the Commerce Commission, the company announced its plan to cut about 125 journalists in Australia, prompting a walk-out by journalists.
Fairfax was trying to save about $A30 million ($NZ32.1 million) through the cuts.
Yesterday, the board confirmed it had received a $A2.2billion bid to split up its businesses from a consortium led by United States private equity firm TPG Capital and Canada's Ontario Teachers Pension Plan Board.
Under the proposal, the consortium would buy the Domain online real estate classified business, Australian Metro Media, including The Sydney Morning Herald, Melbourne paper The Age, and the Events and Digital Ventures business.
TPG already has a stake in Fairfax Media, buying a 5% stake in March. The consortium is offering A95c a share in cash to take the assets and create Domain Co, which would not be listed.
The proposals leave Fairfax's New Zealand news assets, which include the Stuff website, The Press, the Dominion Post, the Waikato Times and a range of Australian radio stations, unwanted by the consortium. Those businesses would be merged into a new ASX-listed company called New Media Co that would also take on 100% of Fairfax's net debt, which was $A111.7 million at December 31.
The New Zealand publishers have yet to announce whether they will appeal the Commerce Commission decision which said the New Zealand merger would create a too-dominant single news-producing group, risking a loss of plurality of opinions and coverage necessary of a healthy democracy.
In a statement, Fairfax Media said the board was reviewing the North American proposal to split its assets and it was wary about the possible outcomes of a merger.
``The Fairfax board notes there is no certainty the indicative proposal is capable of being implemented given the complexity involved in splitting the businesses.
``The proposed split of businesses may not optimise shareholder value,'' the statement said.
``Regardless of any potential proposal, the Fairfax board believes Fairfax has a very attractive future and that the company is well positioned to continue to deliver value.''
Fairfax was continuing to progress the announced potential separation of Domain group, the board said.
Fairfax Media shares jumped to a five-week high of $A1.08 after the board said it was considering the proposal to split up its businesses.
