May 19, 2017 Last Updated 7:41 am

TPG Capital commits to editorial independence for Fairfax Media, as senator worries about Russian influence at PE firm

US Congressman is said to have reached out to Australian Senator representing New South Wales to warn him about a connection between the PE firm and the Russian government

The media drama in Australia over the fate of Fairfax Media continued today with the public testimony of Joel Thickins, head of TPG Capital Australia and New Zealand. The hearing of the Senate Select Committee on the Future of Public Interest Journalism in Melbourne produced a commitment from the US private equity firm TPG that should they acquire Fairfax that the company would maintain its editorial independence.

But TPG also said that, like many PE firms who have acquired media properties, they would look to exit their investment in the standard five year time frame.

TPG had originally bid on only a portion of Fairfax’s holdings, its Australian newspapers and its digital real estate business, Domain. But the company revised its bid to $2.76 billion for the entire company. Partnering with TPG in the effort is the Ontario Teachers Pension Plan, an independent organization responsible for administering pensions for school teachers of the Canadian province.

“We believe quality journalism based on integrity is one of the cornerstones of a healthy and democratic society,” Thickins said. “Quality journalism around the globe has been put in a precarious position by the disruption and the commercial framework that has traditionally supported it.”

But Labor Senator Sam Dastyari, who represents New South Wales, expressed concerns about links between TPG and the Russian government. Dastyari said that he had been contacted overnight by TPG employees and a US Congressman, with information regarding TPG’s Russian activities.

“They felt that it was astounding we’d be even having a conversation of TPG Australia being able to buy a newspaper asset, when, for instance, you have as a senior adviser to TPG the son of the Russian Foreign Minister,” Dastyari said, according to The Sydney Morning Herald.

Thickins said he was not aware of any Russian connections.

All this may be irrelevant in the end, as another US private equity firm, Hellman & Friedman, has also bid on Fairfax Media, and right now their bid is slightly higher than TPG’s.

H&F has had more history with media ownership, having had stakes in Advanstar, Axel Springer, Digitas, DoubleClick, and The Nielsen Company. Also, one of the company’s senior advisers is Brian Powers, chairman of Fairfax from 1998 to 2002.

But that was a long time ago, and TPG’s holdings are more extensive. Ultimately, the board of Fairfax will go with whichever company will pay more, right?

In the end, whoever wins, TPG or Hellman & Friedman, would need the approval of the Foreign Investment Review Board in order to close the deal for the Australian publisher.

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