Fairfax bidder pledges not to meddle with editorial independence

Editors and reporters would continue to determine what gets published, one of the two bidders vying the media group has assured a Senate committee.

Editors and reporters would continue to determine what gets published, one of the two bidders vying the media group has assured a Senate committee. Photo: Getty

A bidder for Fairfax says it would sell the media group within five years, vowing to uphold the charter of editorial independence that has allowed editors and journalists to determine content without input from the board.

TPG Capital and Ontario Teachers’ Pension Plan Board made a $2.76 billion bid for the newspaper publisher on Monday, having initially offered $2.2 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 “within four to five years.”

However he said that would not preclude TPG from making investment decisions extending beyond that timeframe.

Mr Thickins told the inquiry journalistic integrity and quality were crucial and the private investors would be “responsible stewards” of journalism and the publisher’s finances.

“The key assets of Fairfax are iconic publications that each play an important role in their community,” he said.

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

San Francisco-based investment fund Hellman and Friedman also lodged an offer of between $2.82 billion and $2.87 billion for Fairfax late on Wednesday.
Fairfax has said it will open its books to both parties to see whether an “acceptable binding transaction can be agreed” for the whole company.

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

Mr Thickins said Fairfax’s struggle for advertising dollars reflected a global trend.
“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 $2.76 billion 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.”

The key change would be the private ownership structure, which he believed would be “positive” for the business.

Asked by crossbench senator Nick Xenophon whether TPG internationally had a history of buying companies and “plundering” the assets, Mr Thickins said: “Our model is to build and grow a successful company. In some cases it’s about focusing on a core business or divesting – each case is specific.”

He said TPG believed keeping the newspaper mastheads and the Domain real estate business together was better in the long-term.

Mr Thickins expressed some doubt about the future of printed newspapers but added he could not make specific comments without completing the due diligence.

“The printed newspaper will continue to face structural decline,” he said.

“But consumers, the audience members, have a higher appetite for content than ever before, so how people access that content is what’s changing.”

Employee entitlements and union agreements would be honoured under any deal, he said.

Mr Thickins said he expected four to five weeks for the due diligence before an offer could be tabled for the board to consider and then it would be three months before shareholders received a vote and an unknown period for the FIRB process.

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