Sunday, June 08, 2008

Informa and UBM in Take-Over Discussions

Several UK newspapers (Telegraph) are reporting that United Business Media has initiated discussions on a £3billion take over of Informa. UBM has not been as active as other media companies over the past several years in expanding their business offerings, on the contrary the company has deleveraged the business and is now a company with relatively low debt. In the US, UBM owns PRNewswire and runs conferences, trade magazines and data and information products through the CMP and Commonwealth Business Media brands. From The Telegraph:

The Sunday Telegraph has learned that United Business Media (UBM), which has a market value of £1.5bn, has approached £1.6bn Informa about a merger that would establish a powerhouse in the increasingly competitive world of business-to-business media. Discussions between the two companies are at a very early stage and are not yet thought to have progressed as far as substantive negotiations about the structure or price of a potential combination. UBM and Informa may come under pressure to confirm the talks to the London Stock Exchange as early as tomorrow morning.
Informa has been considered a buyout candidate over the past several months since their long time CEO David Gilbertson left to run PE led Emap Communications. Business media and conferencing companies have become hot properties because their subscription based business models mitigate much of the variability in advertising based businesses. Steady cash flow is highly desirable.

More Informa

In the ebb and flow of big media deals it is interesting to note that having spent the last several years on the sidelines unable to compete with the very large multiples that PE players were prepared to pay, some operators like UBM may be well positioned to make significant strategic acquisitions as those same PE companies become skittish in the current market. Last week we saw CQ Press acquired by SAGE and an effort by Reed Elsevier to sweeten the pot for potential acquirers of Reed Business. Analysts are now suggesting that RE may be unable to sell the RBI unit in one piece which would have been unheard of only 18mths ago.

Update Monday: Telegraph confirms discussions and notes share price jump

Other reports:
Forbes picks Candover but not until summer.
Earlier report from The Telegraph proposes other bidders including Axel Springer.
TimesOnline: Informa Garners Attention

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