Apax, HMTF sell remaining Yell shares

The two firms have fully realised their £650m investment in the UK directories business, returning more than £1.4bn in under three years.

Apax Partners and Hicks Muse Tate & Furst have completed their exit from UK telephone directories business Yell, selling their remaining stake for a total of £720 million (€1.03 billion; $1.31 billion).

Both firms today sold their entire holdings of shares in Yell at a price of 303 pence per share, a discount of 1.5 percent to the previous day’s close. According to the Financial Times, both firms reported a multiple of over 2.5 times their original investment.


Goldman Sachs and Merrill Lynch placed a total of 238,052,246 shares, representing 34.2 percent of the issued share capital, raising proceeds of approximately £720 million.


The sale fully realises both firm’s investments in the business acquired from British Telecom for £2.14 billion in 2001. The two firms reportedly invested around £650 million in the buyout, and the latest share sale takes their total return on the deal to £1.4 billion, following the initial sale of shares at the time of Yell’s initial public offering in July 2003.


At that time Apax and Hicks Muse opted for a launch price of 285 pence per share, towards the top end of the 250 pence to 300 pence indicative price range, in an offering that was five times oversubscribed. Shares in Yell have since climbed in price to their current level of 305 pence. The current market capitalisation of Yell is £2.15 billion.


Yell has reported strong growth since the business was acquired in 2001. From 2002 to 2003, Yell’s UK printed directories business achieved a growth rate in turnover of just over six per cent. Turnover has grown from £774 million in the 2001 financial year to £1.1 billion in 2003. During the same period, EBITDA grew from £234 million to £323 million.


“We are extremely pleased with the strength of institutional demand for Yell shares and look forward to creating further value for our new and existing shareholders,” said John Condron, CEO of Yell, said this morning.


The successful placement is particularly good news for Hicks Muse, which is currently in the market to raise €1 billion ($1.27 billion) for its second European buyout fund.