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Consortium drops bid for Informa over finance crunch
A private equity consortium drop-ped its 1.9 billion pound (Dh12.78 billion) bid for British media company Informa amid turbulent credit markets and Informa said it was not in talks with other potential buyers.
- Reuters
- Published: 23:42 September 19, 2008
London: A private equity consortium drop-ped its £1.9 billion (Dh12.78 billion) bid for British media company Informa amid turbulent credit markets and Informa said it was not in talks with other potential buyers.
The sale would have been one of the largest leveraged buyouts to be assembled since the credit crunch struck in mid-2007, but was delayed by the difficulty of securing financing, and a reduced offer was rejected by Informa.
Publishing and events group Informa had said the offer significantly undervalued the company. The consortium reduced a preliminary offer worth 2.2 billion pounds after it carried out due diligence while credit markets deteriorated.
Shares in Informa fell as much as 9 per cent yesterday, but recovered after Informa said it was confident of its full-year outlook. By 1015 GMT (2.15pm UAE time), they were up 1.2 per cent at 345.25 pence, against a European media index up 4.3 per cent.
The shares had been falling over the past weeks as the extent of the credit crisis became apparent and were already trading well under the offer price.
Six months' time
The consortium of Blackstone, Carlyle Group and Providence Equity Partners said they reserved the right to make or participate in an offer for Informa within six months subject to certain conditions.
Informa's titles include the maritime newspaper Lloyd's List and the company organises the world's biggest wireless fair, Mobile World Congress.
On Friday, a spokesman said: "It's no surprise, given recent events, that funding of deals is more challenging.
"The board remains confident of the prospects of business for the year and confirms that Informa is trading in line with the board's expectations," he added.
UBS analyst Polo Tang wrote: "We originally believed the consortium was prepared to make a revised offer, but ... events in the financial markets over the past week mean they were unable to finance an increased bid."
The private equity firms said they could return if another party bid for Informa, if Informa's directors agreed or if there was a material change in circumstances.
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