Apax and Hick, Muse bid for US directories

The two private equity firms are looking to add the directories business of McLeodUSA to their investment in Yell.

Apax Partners and Texan private equity firm Hick, Muse, Tate & Furst (HMTF) are reported to have made a $550m to $600m joint bid for McLeodUSA’s directories business.

The bid exceeds the $535m offered by rival private equity house Forstmann Little at the end of last year, according to The Wall Street Journal.

Forstmann, which already owns 20 per cent of struggling McLeod, agreed to buy the business as part of a proposed restructuring plan. Selling the directories business is one of the moves considered by McLeod to avoid bankruptcy.

The root of Apax’ and HMTF’s interest in the unit are obvious. Last year the pair bought the yellow-page business, Yell Group from British Telecom.

Increasingly private equity firms are being drawn to directories because of their steady cash flows. Also last year the US firm Texas Pacific Group bought the directory arm of Norwegian company Telenor and a group of firms led by Thomas Lee Partners and Providence Equity Partners bought TransWestern Publishing.