Livewire readers may recall two previous articles that I wrote a few weeks back covering the details of the (then current) takeover approaches made to Fairfax Media by two private equity firms that were interested intaking Fairfax private. If not, you can find them here and here.
Since my last article, the worst-case scenario has unfolded for anyone who bought the stock in expectation of the takeover proceeding, as both bidders announced earlier this week that they had chosen not to make binding offers for the company, instead choosing to walk away from any further talks with the owner of Domain and The Australian Financial Review.
As expected, the share price of FXJ has suffered a sharp fall (down a little more than 20% from its recent high) since news of the failed bids was released. Those who took the risk and entered a position on news of the initial non-binding offers after thinking that one of the deals was likely to result in a binding offer would now be showing a considerable loss.