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Fairfax Media appears extremely close to being declared 'on the market'as a new bidder,Hellman & Friedman, entered the auction room on Wednesday night with an indicative offer thattrumped the TPG offer already on the table.

This could easily mark the start of a bidding war between two US private equity groups, likely to move the 176-year-old media group into foreign hands.

In a strange historic twist,Hellman&Friedman -which lobbed a prospective price of between $1.225 and $1.25 a share - is no ordinary bidder: It was part of Tourang - a consortium of investors including Canadian media baron Conrad Black andthe late Kerry Packer, whichbought Fairfax out of receivership in 1992.

Hellman's current Emeritus chairman, Brian Powers, was once thechairman of Fairfax and later became Kerry Packer's right-hand man.

The private equity firm's emergence this week is no accident.

Since the board became aware of TPG's interest in Fairfax, it hadbeen actively canvassing other potential bidders - among them Hellman & Friedman. TPG, which is currently offering $1.20 per share for Fairfax, and Hellman & Friedman have now both been given the green light to undertake a close look at Fairfax's books.

Both Fairfax chairman, Nick Falloon and its chief executive Greg Hywood are considered close to Powers.

During Powers' chairmanship of Fairfax, Hywood was editor in chief of the Sydney Morning Herald.Falloon was the head of Kerry Packer's television group then called PBL, while Powers was head of the Packer's Consolidated Press.

Back in 2010, Falloon also (but unsuccessfully) approached Hellman & Friedman as a potential buyer for Canwest's stake in Ten Network.

The Fairfax board had been aware for a while that Hellman & Friedman had been sniffing around, but did not know of its intention to bid until it received notification on Wednesday evening.

While Powers will be taking an active interest in the current bid for Fairfax, the executive running the process for Hellman & Friedman is itsdeputy chief executive, Patrick Healy.

The private equity firm has plenty of experience in the digital classified property arena as part owners ofGermane-commerce group Scout24, which is led by Greg Ellis - who himself was instrumental in setting up and running REA Group, the arch competitor to Fairfax's property website Domain.

TPG, on the other hand, has Domain boss Antony Catalano in its corner. He appears to have tied his fortunes to TPG, having already been nominated to run Fairfax under TPG's ownership.

If TPG issuccessful, it plans to keep the major newspaper titlesalong with Domain and sell off the remaining assets, including radio, Fairfax's New Zealand newspapers and its 50 per cent stake in video streaming business Stan.

Despite Hellman & Friedman's connections with Fairfax, the board will need to decide whether either offer will be enough to satisfy its major shareholders, who at this stage have mixed opinionsabout the price.

For some shareholders, a price of $1.25 a sharewould be enough to garner support, while others would prefer more and would rather take their chances with Fairfax's own proposal to spin off 30 per cent of Domain into a separately listed company.

But the Domain spin-off is increasingly looking like a fall-back position. If Falloon can extract a fair offer price, the Foreign Investment Review Board would be the only thing standing in private equity's way.

With the Fairfax share price punching above $1.23 on Thursday morning, the punters are calling it 'game on'.

Read more here:
It's 'game on' in the battle for control of Fairfax - The Sydney Morning Herald