Emap Agrees To £1bn Sale Of B2B Titles After Reversal Of Strategy

Emap, the UK publishing business, has performed a U-turn on its plan to keep its business-to-business titles after agreeing a £1 billion sale of the division to Guardian Media Group and Apax Partners, the private equity group.

The deal is a reversal of strategy, as Emap said just two weeks ago that it would withdraw the sale of its business-to-business unit and run it as a stand-alone operation under chief executive Derek Carter. Mr Carter is set to remain at the company.

The decision to sell the division signals the end of the publicly listed group. Earlier this month it agreed to sell its consumer magazines and radio businesses to the German media group H Bauer for £1.14 billion.

Sources said the change of strategy came after it realised the market had not responded well to its failure to sell the business-to-business unit, despite the attractive price it received for its two consumer-facing businesses.

Under the terms of the deal, Emap shareholders will receive 470p in cash for each Emap share, paid by Eden Bidco, the name for the combined GMG and Apax buyout vehicle.

At the time of the Bauer deal, Emap announced plans to return £1 billion to shareholders by way of a special dividend of 461p in cash. Eden Bidco said Emap shareholders would now receive 931p per share in cash - a 22.6 per cent premium to the closing price of 759½p on December 20.

Shares in Emap, which was formed as East Midland Allied Press in 1947, surged 165½p on the news to 925p.

Apax and GMG said they had invested “considerable time and resources” in evaluating Emap and believed that the acquisition represented a compelling investment. They said they planned to support Emap’s strategy of organic and acquisitive growth and extend the group’s brands.

Apax Partners is understood to be keen to combine Emap with Incisive, the specialist business-to-business publisher it acquired in September.

Carolyn McCall, the chief executive of GMG, said: “The acquisition meets our requirements in terms of diversifying GMG’s media interests, in line with our commitment to guarantee the long-term financial security of The Guardian. We look forward to working in partnership with Apax as we develop the business.”

Earlier this year GMG sold 49.9 per cent of Trader Media Group to Apax, although sources said Trader Media would be “very separate” from Emap.

The rival private equity groups, Permira, Providence and a consortium of Cinven and Candover, were also pursuing the business-to-business arm of the publisher earlier this month.

Apax was advised by Deutsche Bank, while Emap’s bankers were Citigroup and Lazard.

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