Emap Sale Faces Rocky Credit Market
Emap plc, the $3.8 billion British media company that publishes 50 consumer magazines covering markets ranging from lads (FHM) to music (Mojo, Kerrang!) to fish (Trout Fisherman), produces 400 b-to-b events and owns radio stations and digital TV channels, has been on the block since July and is reportedly looking at a possible three-way break-up of its media divisions. A sale of the entire company is not out of the question, but could be problematic for a leveraged buyout due to the rocky credit market.
A source with direct knowledge of the process tells Folio: Alert that three "information packages" have been sent and bids are due October 1st. "The process is still being described as a review, with the board explicitly reserving all its rights to sell one, all or none of the three divisions," says the source.
The deal is attracting interest from a wide variety of European and American buyers, strategic and private equity alike. The U.K.-based Times reported that the b-to-b group appears to be receiving the most interest, with a value said to be $2.6 billion. The Times pegs UBM and Guardian Media Group and private equity firms including Apax Partners as potential bidders.
Three memorandums were reportedly released in August, and the Times also reported that Quadrangle, which backed former Wenner Media veteran Kent Brownridge to buy the U.S. titles from Dennis Publishing for $240 million in August, and Veronis Suhler Stevenson have expressed interest in the $1.4 billion consumer publishing division.
The radio and TV group, estimated at $800 million, is being examined by Global Radio, GCap Media and private equity group 3i, says the Times.
The sale of the company is happening during a nasty credit market. And it is deals of this size that are particularly vulnerable if the buyer is expected to apply any meaningful leverage to help finance the deal. Accordingly, London’s Telegraph reports that stapled financing has been offered from the company’s lending banks to allay fears that other lenders would be unwilling to back such a big deal. Nevertheless, reports have indicated that this deal may be out of reach for the leveraged buyers, but enough interest from strategics is keeping the deal alive.
Meanwhile, Reuters reports that Emap has sold its Australian magazine business for $79 million in cash to Sydney-based consumer magazine publisher ACP Magazines Ltd.