Fairfax Media has received a competing bid from global private equity firm Hellman & Friedman valuing the publisher at up to $2.87 billion.
From global private equity firm Hellman & Friedman, the bid is for a range of $1.225 to $1.25 per share, compared with the TPG consortium proposal of $1.20.
The competing bid values Fairfax between $2.82 billion and $2.87 billion versus the TPG consortium proposal of $2.76 billion.
Fairfax shares are up 6.7 per cent to $1.2375, a more than six-year high.
The board has considered both indicative proposals and will invite both the TPG consortium and Hellman & Friedman to conduct due diligence in order to establish if an acceptable binding transaction can be agreed.
"The Fairfax Board appreciates the support shareholders have demonstrated for Fairfax's current strategy and the potential separation of the Domain Group," Fairfax chairman Nick Falloon said.
"We have carefully considered the Indicative Proposals and believe it is in the best interests of shareholders to grant both parties due diligence to explore whether a potential whole of company proposal is available."
It's believed the Hellman & Friedman bid is being led by the private equity firm's deputy chief executive Patrick Healy, but with chairman emeritus Brian Powers understood to be involved.
Mr Powers was chairman of Fairfax from 1998 to 2002 and is understood to have had a good working relationship with current chief executive Greg Hywood.
Mr Powers first came to Australia with Hellman & Friedman as part of the Tourang consortium, which included Canadian media baron Conrad Black and Australian media mogul Kerry Packer, to take on Fairfax from receivership in the early 1990s.
Previous to joining Fairfax he spent five years as managing director and chief executive of Mr Packer's Consolidated Press Holdings and Publishing and Broadcasting Limited.
Mr Falloon, Fairfax's current chairman, spent 19 years working for Mr Packer between 1982 and 2001.
The Australian Financial Review's Street Talk column flagged Fairfax was to make a key announcement on Thursday morning.
A TPG spokesman said: "We welcome the Fairfax board's decision to allow the consortium to conduct due diligence."
In 2014, Hellman and Friedman acquired Scout24, which operates classifieds websites in Germany and Western Europe.
Scout24 is run former REA Group chief executive Greg Ellis.
Fairfax will press ahead with its plans to separately list its own real estate classifieds business Domain while due diligence is being under taken.
It's understood it will take about a week for Fairfax's books to be opened to the private equity firms.
More to come.
