Apax and Hicks Muse head consortium to buy Yell

BT is discussing the sale with a private equity consortium including Apax and Hicks Muse.

Apax Partners and Hicks, Muse, Tate & Furst form part of a consortium that is in discussions with British Telecommunications (BT) about buying Yell, BT’s directory business. The Yell directory business would cost more than £3bn.

According to the Financial Times, the consortium is just one of at least three groups understood to have approached BT about Yell. Another private equity consortium including Kohlberg Kravis Roberts and Texas Pacific Group is also interested, as is Seat Pagine Gialle, the Italian yellow pages business.

After preliminary talks with all three groups, BT is reported to be concentrating on the Apax/Hicks Muse consortium. Neither BT nor the consortium would comment.

BT wants to sell Yell in order to reduce its debt of about £30bn. It had planned a £3.1bn flotation for Yell, but the fall in telecoms shares forced a rethink. In January, BT said it would look at other options, including a demerger. It has not yet made a firm decision to sell.

No deal will take place before the UK Office of Fair Trading decides whether Yell’s dominance of the UK yellow pages market is unfair. Yell is predicted to make underlying profits of £250m this year.