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We'll sell Fairfax in five years: TPG

NZ Newswire logoNZ Newswire 19/05/2017 Paul Osborne and Daniel McCulloch

A bidder for Fairfax says his consortium would sell the media group within five years of buying the company.

TPG Capital and Ontario Teachers' Pension Plan Board on Monday made a $A2.76 ($NZ2.97) billion bid for the newspaper publisher, having initially offered $A2.2 billion for parts of Fairfax.

TPG's head of Australia and New Zealand Joel Thickins told a Senate inquiry in Melbourne on Friday his company would look to grow Fairfax and then offload it.

When asked a timeframe, he replied "within four to five years."

But Mr Thickins told the inquiry journalistic integrity was crucial and TPG would be "responsible stewards" of journalism and the publishers's finances.

"I also acknowledge the key assets of Fairfax are iconic publications that each play an important role in their community," he said.

"I'm here to assure you that in the event that TPG and its partners are fortunate enough to acquire Fairfax we will be responsible stewards of those assets from a journalistic perspective as well as a financial one."

He said the bid remained indicative and non-binding and the companies had not yet been granted due diligence.

"We have no way of knowing whether that will occur," he said.

San Francisco-based investment fund Hellman and Friedman also lodged an offer of between $A2.82b and $A2.87b for Fairfax late on Wednesday.

Fairfax has said it will open its books to both parties for due diligence, to see whether an "acceptable binding transaction can be agreed" for the whole company.

Any formal board-recommended takeover offer for Fairfax would require approval from its shareholders, the Foreign Investment Review Board and New Zealand's Overseas Investment Office.

Mr Thickins said media companies that will thrive long-term are those centred on high quality, high integrity content that a broad spectrum of readers can trust and rely on.

"Quality content is the key for all media organisations and will be the cornerstone of a successful Fairfax into the future," he said.

He said Fairfax's struggle for advertising dollars was a global issue across the industry.

"This issue will continue to have an impact on Fairfax regardless of who owns it moving forward," he said.

"But TPG would not be bidding $A2.76b for the equity of Fairfax if we do not intend to grow the business and make it successful and sustainable.

"We believe we can help this iconic Australian media business compete with the challenges posed by Google, Facebook and Twitter."

He said TPG would manage Fairfax but had no intention of editing its papers and vowed to uphold its editorial independence.

The inquiry continues.

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