* Fairfax says received no bids from TPG or Hellman & Friedman
* Bidding war had propelled shares to six-year high
* Company to proceed with plans for Domain Group demerger
* Shares down 13 pct (Recasts, adds fund manager quote, shares)
By Byron Kaye and Tom Westbrook
SYDNEY, July 3 (Reuters) - Australian newspaper publisher Fairfax Media Ltd said two private equity firms withdrew from rival takeover bids worth up to A$2.9 billion ($2.2 billion), leaving it to proceed with demerger plans and sending its shares sharply lower.
The country's oldest newspaper house, owner of The Sydney Morning Herald and The Australian Financial Review, was midway through spinning off its property listings unit when TPG Capital Management LP and Hellman & Friedman made buyout approaches in May.
With neither firm lodging a binding offer by a June 30 deadline, Sydney-headquartered Fairfax said it would now press ahead with a break-up which would see it list its biggest revenue generator, Domain.
"It appeared that the complication of our business was such that they didn't want to bid for the whole business," Fairfax Chairman Nick Falloon told an analyst briefing on Monday morning.
Fairfax shares fell as much as 13 percent, hitting their lowest intraday level since March, 92 cents, compared with the higher of the private equity indicative bids, A$1.25. The stock traded at A$5.00 in 2007.
Traditional media companies around the world have been in decline as customers seek content more cheaply online and advertisers focus their spending on internet giants like Facebook Inc and Google.
Domain however has benefited from a property boom in Sydney and Melbourne. A standalone Domain listing will see it compete more directly with REA Group Ltd, a property classifieds business two-thirds owned by News Corp.
REA shares have doubled in two years and Fairfax shareholders have long hoped for similar returns from a Domain listing, with Fairfax keeping up to 70 percent of the unit.
"Domain's continuing to grow and ... get closer to REA," said Reece Birtles, managing director at fund manager Martin Currie Australia, Fairfax's second-biggest shareholder.
"The digitisation of the traditional newspaper business is removing significant costs, so we think they have a good future."
Fairfax said that while overall revenue fell about 6 percent for the year to June 30, Domain's revenue grew about 10 percent, including an increase of 22 percent in digital revenue.
It said it expected to report pre-tax profit between $262 million and A$266 million for the year, in line with analyst expectations and down as much 7.5 percent on the previous year.
A Hellman & Friedman spokeswoman was not immediately available for comment. TPG confirmed on Sunday that it had abandoned its bid without offering an explanation.
The troubles for Australia's media are not limited to newspapers. Free-to-air television broadcaster Ten Network Holdings Ltd said on Monday receivers had been appointed and it had secured funding to stay afloat until Aug. 31.
$1 = 1.3006 Australian dollars Reporting by Byron Kaye and Tom Westbrook; Editing by Stephen Coates