Yell explores Italian options

The UK directories business has won support from Apax Partners for a bid for the Seat Pagine directories business put up for sale by Telecom Italia.

Yell, the former telephone directories business of UK national operator British Telecom, is planning to launch a bid for Seat Pagine Gialle, the Italian directories business put up for sale by Telecom Italia.


Yell, publisher of Yellow Pages, has won backing from Apax Partners, which co-led the £2.14bn buyout from BT in 2001, for a bid for Seat Pagine. Hicks Muse Tate & Furst, which co-led the Yell buyout alongside Apax, is considering the proposition, according to The Independent newspaper.


A link-up between Yell and Seat Pagine would create one of the world’s largest directories businesses, with operations in the UK, US and Continental Europe.


Apax and Hicks Muse considered a part-exit of Yell last year via a flotation, although difficult IPO market prevented a listing.


There are now four private equity consortia bidding for the unit, in what is shaping up to be Europe’s largest private equity deal in 2003, and comfortably the biggest ever completed in Italy.


More than ten private equity firms have thrown their hats into the ring, with the Carlyle Group, Providence Equity Partners and Thomas H Lee the latest to form an alliance. Kohlberg Kravis Roberts, Texas Pacific Group and Blackstone Group have joined forces to bid, as have BC Partners, Permira, CVC Capital Partners and Investitori Associati.


Seat Pagine Gialle last year reported turnover of E1.99bn in 2002, comparable with the 2001 numbers (E1.96bn), although EBIT was up 16 per cent from E200m to E232m.


It is not certain whether Yell’s backers are evenly equipped to fund such an acquisition at present. Apax, which closed a E4bn fund only two years ago, is in a better position to inject more equity into the business than Hicks Muse, which is currently planning to launch a E1.5bn European buyout fund.


Yell’s interest in Seat Pagine further expands Apax’s growing involvement in Europe’s big buyout market. The UK firm has linked up with UK science publisher Taylor & Francis in the E1bn auction for Bertelsmann's scientific books and journals business. It has also been linked with an offer for English, Welsh & Scottish Railways (EWS), the UK rail freight operator valued at £500m, and Inmarsat, the global satellite operator, where it has joined up with Permira to launch a £600m buyout bid.