TPG ups bid for Australia's Fairfax Media

A consortium led by private equity giant TPG Capital upped its offer for troubled Fairfax Media Monday and now wants to buy out the entire firm.

Last week TPG and the Ontario Teachers' Pension Plan Board offered 95 Australian cents per share for Fairfax's leading mastheads and its lucrative Domain Group focused on property advertising.

This would have left shareholders with Fairfax's regional papers, 50 percent of its online streaming service Stan and its beleaguered New Zealand business, which was recently dealt a blow when the country's competition watchdog rejected a merger with NZME.

TPG has boosted its offer to Aus$1.20 a share in a deal that would see it takeover the whole business. Fairfax newspaper the Australian Financial Review valued the new deal at Aus$2.7 billion (US$2.0 billion).

It sent the company's shares more than seven percent higher to Aus$1.145 in early afternoon trade.

"The Fairfax board of directors is reviewing the revised indicative proposal," the media giant said in a statement.

"The Fairfax board notes that there is no certainty that the revised indicative proposal will result in an offer for Fairfax, what the terms of any offer would be, or whether there will be a recommendation by the Fairfax board."

Any such deal would require rubber stamping by the government's Foreign Investment Review Board.

The TPG offer comes amid hefty cuts at Fairfax which earlier this month saw journalists strike for a week protesting job losses as the publisher struggles with dwindling advertising income.

While its newspaper business has been hit by a slump in advertising revenue, Domain has seen revenues grow, with the company seeking to spin off the profitable property advertising hub into a separate business.

The group is the main rival in Australia to News Corp, Rupert Murdoch's Australian empire, which is also imposed staff cuts amid falling revenues.

Fairfax in February reported a six percent rise in half-year net profit to Aus$84.7 million amid cost-cutting and a strong showing by Domain.