GMG-Apax sweeten deal to win Emap

Trade buyer Guardian Media Group has helped push Apax's bid for Emap's business to business arm over the line, despite difficult market conditions.

Emap, the UK media group, has sold its remaining assets – the business to business unit it had pulled from a sale earlier this month – for £1 billion ($1.98 billion; €1.38 billion) to a consortium of Guardian Media Group and Apax Partners, a European buyout firm.

GMG and Apax said they are offering 470p a share in cash.

Emap shareholders would also receive the 461p a share special dividend announced alongside the £1.14 billion sale of the group’s radio and consumer magazines divisions to H Bauer, the German magazine publisher.

At that time Emap had decided to retain the business to business unit, saying the board believed best value would “be achieved through continuing to operate this focused business on a standalone basis and, accordingly, the board has terminated all discussions with parties interested in Emap Communications.”

However, Alun Cathcart, executive chairman of Emap, said in a statement that Apax/GMG had returned with a sweetened offer of £9.31 per share, including the dividend payment, which the board felt was a fair valuation of the business and met the stated aim of the review to unlock value. 
He said: “Throughout all our discussions with Apax/GMG, they have always been extremely positive about the strength of the B2B brands and indicated their desire to execute a growth strategy for the business.  Their enthusiasm for the business potential has been clearly demonstrated by their determination to secure the business and raise significant additional funds in difficult market conditions and amongst macro-economic concerns.”

The recommended offer values the company at £2 billion, compared with Emap’s book value on Thursday of £1.6 billion.

Cathcart said it was an opportunity for shareholders to crystallise the value of Emap’s business unit at a 57.5 per cent premium to its current underlying market valuation.

GMG and Apax, who have teamed up previously to share the Trader Media Group, were one of several consortiums interested in Emap’s B2B business, which includes publications such as Broadcast and Retail Week and a variety of events and exhibitions businesses.

Other bidders included Providence Equity Partners, teamed with Permira, and Cinven with Candover.

Carolyn McCall, GMG chief executive, said in a statement: “The acquisition meets our requirements in terms of diversifying GMG’s media interests, in line with our commitment to guarantee the long-term financial security of The Guardian.”