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Fairfax shares hit five year high as takeover speculation grows

Share in Fairfax Media have today hit their highest point in more than five years as speculation continues to grow that private equity company TPG Capital is poised to launch a takeover bid.

The valuation of the company – listed on the ASX as FXJ – has risen by 17% in the last month and by about 10% in the last week alone.

Earlier today the FXJ share price topped $1.10 for the first time since May 2011, giving it a market capitalisation of $2.5bn.

Fairfax’s growing share price since 2012 | Source: Google Finance

On Monday’s Fairfax’s business newspaper the Australian Financial Review predicted that TPG could launch a bid “as early as this week“. The AFR today reported that TPG had begun buying shares in the company.

If a takeover bid gets underway, it would be as an alternative move to Fairfax’s own plans to float its realestate site Domain as a separate listing on the ASX in an attempt to unlock greater value. By contrast, the News Corp- aligned REA Group, which is separately listed, has a market capitalisation of $7.85bn

Fairfax’s non-growth media assets include the Sydney Morning Herald, The Age and regional newspapers. Fairfax also owns stakes in streaming service Stan and talk radio company Macquarie Media.

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