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Published on: Thursday, May 18, 2017

  • An even bigger bid for Fairfax has come from another US private equity firm, San Francisco-based Hellman & Friedman. The private equity firm made an indicative cash offer of between $1.225 and $1.250 per share on Wednesday – valuing Fairfax at between $2.82 billion and $2.87 billion. On Monday, Fairfax received a fresh bid from TPG Capital and Ontario Teachers’ Pension Plan Board, which valued the company at $2.76 billion. "The Fairfax Board has considered the Indicative Proposals and determined they will invite both Hellman & Friedman and the TPG Consortium to conduct due diligence in order to establish whether an acceptable binding transaction can be agreed,” said a statement to the ASX. 
  • Virgin Australia Holdings posted an underlying loss before tax of $62.3 million and a statutory loss after tax of $69.0 million for the third quarter of FY17. Among factors affecting performance, the company noted costs associated with their fleet simplification program, subdued domestic industry trading conditions, and Cyclone Debbie. However, they also noted the Group’s continuing efforts to improve its debt and financial leverage positions. “As at 31 March 2017, the Group’s Net Debt has reduced by $627 million (33%) compared to 30 June 2016". They expect underlying performance for the fourth quarter to improve on the corresponding period last year. 
  • Yesterday Standard and Poor’s affirmed the nation’s esteemed AAA credit rating. In response to last week’s Federal Budget, the ratings agency declared the credit rating as safe. This response was keenly awaited, since S&P placed the Government’s credit rating on negative watch last year, meaning there was a chance of a downgrade. However, S&P has kept its negative outlook in place, with doubts about the projected return to surplus in 2020/21.  
  • At 0700 AEST on Thursday, the local share price futures index was up down 62 points, or 1.1 per cent, at 5,720.

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