Two Wall Street private equity firms are bidding to aquire Fairfax Media, the Australian company that owns The Sydney Morning Herald and real estate portal Domain.
TPG Capital and Hellman & Friedman have made bids for Fairfax, valuing it at almost $3 billion. Property is the major attraction for these US companies. In Sydney and Melbourne, house prices have experienced continued growth, and investors want to get in on the action through sites like Domain. This interest is despite the fact that Fairfax annouced redundancies just weeks ago.
The bidding war has raised concerns that Fairfax bidders will shrink print operations in order to invest in the company's digital real estate advertising arm. Staff members at both The Sydney Morning Herald and The Age went on a weeklong strike this month over job cuts.
The bidding war has also started a battle between the two private equity firms and Rupert Murdoch's media empire News Corporation. Domain shares a duopoly in property ad sales with realestate.com.au, which is owned by News Corp.