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Friday, November 9, 2007

Emap sale on track

Emap sale on track

Emap shares were boosted on Friday after it declared that an “offer period” for the company had commenced as it said it had received “good interest” from both trade and private equity buyers in all parts of the group.

Emap, which has been assessing interest in the potential sale of its three divisions said it continued to be “encouraged by progress” on its strategic review.

The comments made against a backdrop of reduced bid activity will likely soothe jitters about whether the break up will proceed and helped push the shares up by 2.5 per cent in early trade to 858 ½p.

Some analysts had predicted shares would drop to 770p if the break-up was pulled. The average break-up value on Emap’s shares is £10.34, based on a Reuters poll of 11 analysts, with a range of 925p-£11.67.

Alex DeGroote, analyst with Panmure Gordon, said: “The key point is that with deals falling apart all over the place this is encouraging. It underlines the fact that these are trophy assets and people are still willing to buy them in this context.”

Emap’s business-to-business division, which includes titles such as Nursing Times and Retail Week, is thought to have attracted first-round bids of £1.3bn or more from Apax Partners with an equity contribution from Guardian Media Group, Candover, Cinven, Permira and Providence Equity Partners.

Consumer magazines has drawn offers of about £700m from a group comprised of Hearst, Quadrangle and Exponent as well as Apollo, Cinven and Providence. Global Radio, which bought Chrysalis’s stations this year has made an offer for Emap’s broadcasting assets. Phil Riley, the former chief executive of Chrysalis Radio, has also led a bid for Emap’s radio assets.

Emap on Friday also asked parties interested in acquiring its business-to-business division to consider buying the Emap’s plc title for a nominal sum, indicating that they expected to sell the other two parts of the business first.

The company said the proposal was being made purely as a possible way of enabling the return of cash, including the proceeds of any potential disposals, to shareholders in an efficient manner.

Emap added that it had not received any approach to acquire Emap as currently constituted and that the commencement of the offer period was not a consequence of any proposal received to date. “The review continues to examine all options including the potential sale or demerger of some or all of the constituent parts of the group.”

The company is without a chief executive since the departure of Tom Moloney in May. Alun Cathcart, the chairman took over day-to-day control of the company after Mr Moloney’s departure.

David Arculus, a former executive at Emap, last month threw down a gauntlet to the directors of the company, saying the board had “lost its way” as he put himself forward as a potential chairman.

Emap is due to announce half-year results on November 13.

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