LONDON (Reuters) – A private equity consortium led by Providence is behind the latest bid approach to British media group Informa (INF.L: Quote, Profile, Research, Stock Buzz), media reports said on Wednesday.
The Times newspaper, without citing sources, said that private equity firm Carlyle was part of the consortium and that talks were at an early stage.
Analysts also expect private equity groups Apax, Candover and Cinven to be interested in Informa as they already have publishing assets which could provide synergies.
Informa shares were down 7.4 percent at 437 pence at 0740 GMT.
Numis analyst Paul Richards said Informa shares had risen sharply since details of a possible merger with United Business Media (UBM.L: Quote, Profile, Research, Stock Buzz) were made public and said the fall on Wednesday reflected concerns that private equity would struggle to secure a deal in the current credit markets.
Informa said on Tuesday it had received a further approach from a third party which it did not identify, and that its talks over a possible merger with UBM had ended. UBM shares were up 0.8 percent on Wednesday.
The Financial Times said Providence had been in informal talks with Informa but that no offer had been made and no bid was likely above 500 pence a share.
Numis said a private equity bid would need to be pitched around 500 pence to succeed, representing a 30 percent premium on the price before the merger talks with UBM were announced.
“As a business built by acquisition/merger, Informa could be dismantled into more manageable pieces relatively easily in our view,” Numis said in a note to clients.
“For example, Springer may enter a consortium to secure the Scientific assets.”
Informa rejected a bid from Germany's Springer Science + Business Media in 2006, saying at the time that the 630 pence offer undervalued the company. Springer is owned by private equity firms Candover and Cinven.
“Springer offered 630 pence for Informa in Oct 2006 and we therefore believe that they could become involved in a consortium given the significant (around 50 million pounds ($97.56 million)) cost savings that could be achieved from the Academic businesses,” UBS said in a note.
Other names linked with Informa include Apax which joined the Guardian Media Group to buy the specialist publishing and conference assets of Emap last year.
Informa declined to comment further on the approach and none of the private equity parties could immediately be reached for comment. (Reporting by Mark Potter and Kate Holton; editing by Rory Channing)