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01 December 2023

Speculative bids lift Emap shares

By Agencies


Shares in media group Emap jumped on Monday on speculative interest as some investors took the view that a counter-bidder may pitch for the company's specialist publishing and conferences assets.

Emap, which is based in London, extends its media portfolio to the Gulf region as the parent company of AME Info and Middle East Economic Digest (MEED), both operating in Dubai.

Several media analysts said the possibility of a counter offer should not be ruled out.

One leading fund manager in Emap said however, such a move was extremely unlikely given Emap has secured agreed deals and the Christmas break would make it that much harder to get relevant dealmakers and advisers together again.

"There is an outside chance, perhaps around 5 per cent, that there could be a counter offer," said Panmure Gordon media analyst Alex DeGroote.

At 1017 GMT, shares in Emap were up 1 per cent at 934 pence, having earlier surged as high as 949 pence. Although trading activity across the stock market was thin ahead of the Christmas break, around 610,000 shares had changed hands, which represents about one quarter of the group's average daily trading volume.

The speculative interest in Emap's shares lifted them above the 931 pence total cash payment shareholders are in line to receive once the company's break-up has been carried out.

In a surprise move on Friday, Emap said it had agreed to sell its specialist magazines and events business to privately owned Guardian Media Group and private equity firm Apax Partners for around GBP1 billion ($1.98 billion).

The business-to-business division publishes a wide range of titles such as Broadcast, the Journal of Wound Care and Fleet News while its leading events include the annual Cannes Lions advertising festival.

The B2B business disposal marked a turnaround from Emap's position on December 7 when it announced the sale of its consumer magazines and radio businesses to German publisher Bauer for GBP1.14 billion, but did not manage to sell its B2B arm. Emap executives said the offers were not high enough.

Emap said it would stick with the division and be a focused B2B business. However, Guardian Media Group and Apax continued negotiations with Emap and secured a recommended cash offer.

Panmure's DeGroote said the Apax and GMG bid was unlikely to fail give the two groups were consistently seen as the most likely buyers of the B2B business, the price being paid is "fairly full" and the offer is recommended.

The Apax and GMG offer, which will see shareholders getting 470 pence per share, is conditional on Emap completing its consumer business disposals and the sale of its Irish radio division.

According to sources familiar with the situation the other groups that had made bids for Emap's B2B assets included buyout firms Permira and Providence, and Candover and Cinven.

As part of its deal with GMG and Apax, Emap has agreed that it would pay a GBP10 million fee if its board fails to unanimously recommend the acquisition, pulls the deal or enters into an agreement with a third party. (Reuters)