Monday, September 10, 2007

Emap Magazines Expected to Attract More Bidders

Emap Magazines Expected to Attract More Bidders
BY James Robinson,,2165137,00.html
The Observer

Finnish publishing giant Sanoma is among the bidders for Emap's consumer magazines, which have been put up for sale by the British media company as part of a likely break-up of the group.

Its biggest titles include 'lads' mags' Zoo and FHM and weekly fashion title Grazia. Sanoma Magazines is one of the largest consumer magazine publishers in Europe. It publishes more than 300 titles in 13 countries, including Marie Claire and Autoweek, many of them under licensing agreements with their ultimate owners. The company claims to be a market leader in Belgium, Bulgaria, the Czech Republic, Finland, Hungary, the Netherlands and Russia.

It already has the licence to publish several Emap titles, including FHM and Top Sante, in foreign territories. 'It already has a big presence on the continent, but this represents a good opportunity to establish a foothold in the UK,' said one City source.

Emap has appointed investment banks Lazard and Citigroup to carry out a strategic review of the business, which is likely to lead to a break-up. The business also owns radio stations Magic FM and Kiss FM, and dozens of business and trade publications.

Some industry analysts have placed a value of £700m on the consumer magazines business, and most expect the break-up of the group to fetch around £2.5bn. A memorandum was sent out to interested parties at the end of last week, and first round bids must be tabled by the end of this month.

Other bidders for all or part of Emap are likely to include German publisher Gruner & Jahr, its French competitor Lagardere, Mondadori, the Italian publishing company controlled by former Italian premier Silvio Berlusconi, and Guardian Media Group, The Observer's parent company. A host of private equity companies, including Apax Partners and Quadrangle Group, are also likely to bid. Apax has reportedly had talks about tabling a joint bid with GMG.

The crisis in the financial markets, prompted by problems in the US sub-prime housing market, is unlikely to affect the sales, according to sources close to the situation, although Emap could be forced to reduce asking prices if the situation worsens.

Emap's former chief executive, Tom Moloney, resigned this year after the company posted a string of profit warnings. Some shareholders had criticised its strategy, arguing that it failed to respond quickly enough to the challenges posed by the internet to traditional magazine businesses.

Emap insisted that investors were supportive and claimed that they played no part in Moloney's departure.

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