Private equity giant TPG Capital is looking at picking up the best bits of Fairfax Australia, according to a report from the Australian Financial Review.

TPG Capital is reportedly seeking to break up Fairfax in a deal which would see it acquire Domain - an online real estate business - along with major Australian mastheads The Sydney Morning Herald, The Age and the Australian Financial Review.

Domain and the mastheads are estimated to be worth about A$2.5 billion (NZ$2.68b).

Fairfax New Zealand's business is left behind, AFR stated, following the declined proposed merger between the media company and Herald owner NZME.

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The proposed merger was rejected in a final ruling by the Commerce Commission on Wednesday after being knocked back in a draft decision last year.

Reports of a possible deal between TPG Capital and Fairfax come during a turbulent time for Australian media.

On the day of the declined merger, Fairfax announced it would be slashing editorial jobs at Australian metropolitan papers by up to 25 per cent, leading journalists to walk out on a strike which will last seven days.