Someone peeks under the covers at Fairfax and finds all is not as it seems

Just in case you were wondering how bad Fairfax’s books really are there was much talk about investors looking to acquire Fairfax. They started due diligence and then on Monday decided  was all too hard once they’d had a good long look under the covers.

NBR reports:

An accounting treatment boosting profits at Fairfax’s real estate unit Domain is reportedly a factor in the withdrawal of private equity bids for the trans-Tasman media group.

Fairfax publication the Australian Financial Review reported over the weekend that private equity firm TPG Capital had formally walked away from bidding, while rival Hellman & Friedman had failed to lodge a complying bid.

The company confirmed the news in a statement to the ASX this morning, saying neither firm had lodged a bid and it would proceed with its original plans to spin out Domain as a separate listed company.

“Accordingly, the Fairfax board has ceased discussions with both parties.”

The AFR quoted Fairfax chief executive Greg Hywood saying it was back to business as usual “now the distraction is over.”

“As you know the bids from the two private equity players were unsolicited.

“But once we received the above market indicative bids we acted in the best interests of our shareholders and ran a process. It is common in these situations for indicative bids not to translate to binding bids.”

On Friday Fairfax shares sank from $A1.20 to $A1.10 amid speculation bids would not eventuate.

The two firms withdrew after reviewing private financial information provided by Fairfax in a due diligence period starting on May 18.

So, Fairfax showed their lingerie, and the investors saw stained y-fronts and skid marks.

 

-NBR


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

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