Wednesday, May 17, 2017

Ron Walker endorses TPG offer for Fairfax Media - but now media silence from former chairman

Former Fairfax Media chairman Ron Walker has endorsed a $2.76 billion takeover bid for the company by the US private equity group TPG and the Ontario Teachers’ Pension Plan.

In interviews with print journalists, Mr Walker said TPG's revised offer for entire Fairfax business would be a good outcome for shareholders and might protect Fairfax's quality journalism at The Age, Sydney Morning Herald and Australian Financial Review.

However, despite endorsing the TPG offer Mr Walker withdrew from a scheduled interview with the ABC's "AM" program after deciding to make no further comments.

Asked whether he had been pressured by Fairfax Media to remain silent on the TPG offer, Mr Walker told the ABC the decision was “my own call”.

A Fairfax spokesman confirmed the request did not come from Fairfax Media and that “we haven’t spoken to Ron”.

But earlier reacting to Mr Walker’s endorsement of the TPG offer,  the spokesman said "Ron's views are Ron's views".

"It's the best thing for shareholders," Mr Walker told The Australian Financial Review which is published by Fairfax Media.

"After having years of not great returns they have now got the opportunity to join one of the world's best dealmakers and make it a very successful company once again."

The intervention of Mr Walker - who led Fairfax from 2005 to 2009 - is seen as significant given concerns that TPG is a foreign predator only interested in the Domain real estate business and intent on breaking up the rest of once mighty media empire.

Mr Walker, who owns Fairfax shares, also anointed the head of the Domain real estate business Antony Catalano as the new chief executive of a restructured company.

"Antony Catalano has always been destined to be a CEO," Mr Walker told the Australian Financial Review.

The ABC understands the endorsement from the former chairman was not welcomed by Mr Catalano given the sensitive stage of the TPG proposal.

The Fairfax board says it is considering the revised offer from TPG of $1.20 a share for 100 percent of the company rather than the original bid for Domain and the three metropolitan mastheads.

The revised offer from TPG on Sunday improves the original bid of 95 cents a share that did not include Fairfax's regional newspapers, its New Zealand assets, its stake in the Macquarie Radio Network and a 50 percent share in the Stan streaming service.

The Fairfax board says if accepted the TPG bid would require approval from shareholders and the Foreign Investment Review Board (FIRB).

Treasurer Scott Morrison would have to endorse any decision from FIRB given national interest issues that could be raised by the sale and possible breakup of the once mighty Fairfax Media empire.

Fairfax shares closed higher yesterday at $1.19 having reached a six year high in the wake of the TPG proposal.

Follow Peter Ryan on Twitter @peter_f_ryan

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