Buyout firms balk at Emap pricing

Trade buyer H Bauer scooped the consumer magazine and radio business divisions of Emap at an 11.2 times profit multiple for £1.14 billion, leaving buyout firms empty-handed.

Media conglomerate Emap has rejected all private equity bidders for its various units, after selling its consumer magazine and radio business to German trade buyer H Bauer for £1.14 billion (€1.58 billion; $2.32 billion). The business comes without cash or debt on its balance sheet.

Grazia: An Emap

Emap decided not to sell its remaining business to business division despite bids being tabled by interested bidders. The victory highlights the resurgence of trade-buyers over private equity, since debt became more expensive in the wake of this summer’s credit turmoil.

H Bauer’s bid was at 2.2 times revenue and 11.2 times operating profit of the magazine and radio divisions, according to a statement by Emap.

The Emap statement said: “The board believes that the best value for shareholders will be achieved through continuing to operate (the business to business division) on a standalone basis and, accordingly, the board has terminated all discussions.”

Emap’s share price dropped 7.45 percent to £7.64 per share at 1041GMT.

TPG tabled a solo bid for the consumer magazine group only, having considered a joint venture with DLJ Merchant Banking Partners, according to a source. TPG tabled its bid on Monday at a price below what Emap were asking, he said. TPG is surprised at the amount the winning bidder paid. “Some of the best deals are the one’s you walk away from, rather than overpaying,” he said.

Apax Partners tabled a bid alongside media company Guardian Media Group for the business to business unit, according to a separate source close to the bid. Emap’s board could not meet Apax and the Guardian on price, he said.

European buyout firms Cinven and Candover also tabled a bid for the business to business and the consumer magazine divisions.

Other interested private equity firms included a joint bid by European mid-market firm Vitruvian Partners and global media specialist Veronis Suhler Stevenson for the radio business and global investment firm Apollo Management alongside media group Hearst for the magazine business, according to media sources.

All interested bidders and Emap declined to comment.