(Adds details, bidder comments)
SYDNEY, May 18 (Reuters) - Australian newspaper publisher Fairfax Media Ltd (FXJ) on Thursday said it would grant due diligence access to two rival private equity bidders after U.S. buyout firm Hellman & Friedman made a surprise takeover proposal of as much as A$2.87 billion ($2.13 billion).
The non-binding cash offer from Hellman & Friedman values Fairfax at A$1.225 to A$1.25 a share, compared to an earlier offer from TPG Capital Management and Ontario Teachers' Pension Plan Board of A$1.20 a share, the Australian company 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," Fairfax Chairman Nick Falloon said in a statement.
The proposals remain subject to conditions including the successful completion of due diligence and foreign investment approvals.
Fairfax, which owns newspapers including The Sydney Morning Herald and The Australian Financial Review, said it would continue to progress a potential spin-off of its Domain real estate classifieds unit during the due diligence period.
The media company said there was no certainty either takeover proposal would result in an acceptable offer.
A TPG spokesman said the private equity group welcomed the board's decision to grant due diligence. A spokeswoman for Hellman & Friedman was not available for immediate comment. ($1 = 1.3444 Australian dollars)
