Reports over the weekend suggest that buyout firms Apax Partners and Candover have tabled a bid for newspaper publisher Trinity Mirror.
The suggested offer price was at 450p per share, valuing the company at around £1.3bn [E2bn]. Sources close to the company though were quick to disparage the formality and substance of the offer saying that it was no more than an informal approach and that the mooted price was only a 12 per cent premium to Trinity's November share price. This was when the two buyout firms had discussed buying the company's regional newspaper titles.
Although a few shareholders have complained that Trinity has failed to rationalise its business and grow profitability, the main institutional money holding the company's shares has given no sign that a bid is awaited. A spokesperson for Standard Life, one such shareholder, commented on BBC Radio 4 today that any offer would have to exceed 500p to warrant attention.
Trinity Mirror hired former EMAP chief executive Sly Bailey in December last year in part to evidence its intention to galvanise its many media assets: she replaces Philip Graf who had attracted criticism for moving the company forward too slowly. The hire was seen as a coup as Bailey had done much to advance EMAP's performance during her tenure.
Both buyout firms have expressed interest in buying European media assets, and both have a long record in investing in this sector. Apax is best known for its acquisition of BT's directories publishing business Yell alongside Hicks, Muse, Tate & Furst. Meanwhile Candover most recently bid alongside Cinven for BertelsmannSpringer, Bertelsmann’s scientific publishing unit and co-invested with the same buyout partner in Kluwer Academic Publishing in a E600m deal.
There is now considerable speculation that further financial buyers, armed with sizeable buyout funds and willing enough bankers, will launch their own bids. As one banker familar with Trinity Mirror commented: 'The cash flows of the company are of the kind of substance that reassures even the most conservative of bankers: a financial bidder would find some ready backers.' The source at Trinity Mirror confirmed that already numerous interested parties had been in touch since news of the Apax, Candover offer was reported.
Trinity Mirror reported turnover of £1.13bn and operating profits of £204m in 2001.