SYDNEY (Reuters) - A consortium led by U.S. private equity firm TPG Capital made a A$2.2 billion ($1.63 billion) cash proposal to acquire Fairfax Media Ltd's (FXJ.AX) metropolitan newspapers and Domain real estate classifieds unit, the Australian media group said on Monday.
The proposal would involve shareholders retaining scrip exposure to the company's regional and New Zealand newspaper assets as well as its radio and digital streaming divisions, Fairfax said in an statement.
Fairfax, owner of The Sydney Morning Herald and The Australian Financial Review, said its board of directors was reviewing the proposal from the TPG-led consortium, which also included the Ontario Teachers' Pension Plan Board.
"The Fairfax board notes that there is no certainty that the indicative proposal is capable of being implemented given the complexity involved in splitting the businesses," the company said. "This proposed split of businesses may not optimize shareholder value."
The consortium is offering A$0.95 a share cash for the metropolitan newspapers and real estate classified assets, which compares with Fairfax's closing price of A$1.06 a share on Friday.
TPG could not be reached immediately for comment.
Fairfax had been planning to demerge its Domain real estate classifieds unit, Australia's second-biggest property listings website, later this year.
The media company's proposal to merge its New Zealand newspaper assets with those of NZME Ltd (NZM.NZ) was rejected last week by regulators in that country on the grounds it would lead to unprecedented local media influence.
Many of Fairfax's Australian newspaper journalists are on strike until Wednesday in protest of plans to cut 125 jobs, or about one-quarter of its editorial staff.
Reporting by Jamie Freed; Editing by Sandra Maler and Peter Cooney