Fairfax Media has confirmed it is in talks with a private equity consortium which has offered to buy some but not all of the troubled media company.
In a letter to staff, Fairfax Media chief executive Greg Hywood said the unsolicited proposal led by private equity firm TPG was indicative and if accepted would require approval from the Foreign Investment Review Board.
However, Mr Hywood said the TPG proposal was preliminary and no decisions has been made.
"There is no certainty that the indicative proposal will result in an offer for Fairfax," Mr Hywood wrote in a letter to staff.
"There is also no certainty that the indicative proposal is capable of being implemented given the complexity involved in splitting the businesses."
The TPG bid, if accepted, would require a complex breakup of the Fairfax media empire.
Mr Hywood said TPG's proposal was to acquire the lucrative Domain real estate advertising business and Australian Metro Media, which includes the mastheads of The Sydney Morning Herald, The Age and The Australian Financial Review.
Under the proposal, Fairfax shareholders would retain current assets in New Zealand, the regional newspapers business, its stake in the Macquarie Radio Network and a 50 percent share in the Stan streaming venture.
The proposal would also have Fairfax retain "existing Fairfax net indebtedness".
It comes as Fairfax Media prepares to sack as many as 125 full-time equivalent positions from its Australian metropolitan newsrooms as part of the latest cost-cutting measures.
Management and exempt union staff have been producing the newspapers after staff went on strike as a result of the cuts.
Fairfax Media is expected to provide an update to the stock exchange on Monday.