Express Mortgages Express Loans Bingo Lose Weight Franchising Dating Shopping Book Shop Find Spare Parts Cut Your Bills Wine Shop Legal Store FlatShare Cruises

MEDIA GIANTS IN TALKS TO CREATE £3BN GROUP

United Business Media has approached Informa

Monday June 9,2008

By Andrew Johnson

Comment Speech Bubble Have your say(0)

TWO of Britain’s biggest media companies are in talks to create a £3billion group bringing together Property Week and shipping paper Lloyd’s List.

United Business Media has approached Lloyd’s List publisher Informa with an all-share merger proposal that would create the country’s biggest information group.

In statements yesterday, the two companies stressed talks were at an early stage and may not result in deal.

However, analysts said there was a logic to UBM’s move as the companies were complementary, both in business and emerging market geographies.

UBM has developed businesses in China and India, while Informa has looked to the Middle East and Singapore for growth. UBM has strong exhibitions and news distribution businesses, while Informa has good business information and conferences businesses.

The lack of significant overlap means there is likely to be little competition concern over the deal.

Analysts also believe a deal would help ease Informa’s debt burden.

The £1.6billion company is carrying £1.1billion in debt. City concerns over Informa’s debt have held back its shares, although they have risen in recent weeks on the back of takeover speculation.

They closed at 386.25p, down 11.5p, on Friday and UBM’s were down 10.5p at 605.5p, valuing the company at £1.5billion.

Other advantages from a UBM perspective include the fact the combined group would enter the FTSE 100 index, bringing on board more investors and making the shares easier to trade.

In terms of management, it is thought UBM feels Informa’s chief executive Peter Rigby, who was chairman until the previous chief left, might be prepared to step up to become chairman of the combined group.

This would leave the way clear for UBM’s chief executive David Levin to become boss of the whole group.

There was speculation yesterday that financial buyers such as Apax and Carlyle Group could step in with a counterbid.

But in such situations trade buyers often hold an advantage because they can extract more cost and revenue benefits.

Also, private equity groups might struggle to raise debt because of the credit crunch.