U.S.-based private equity firm Providence Equity Partners Ltd. Thursday confirmed that investment funds advised by Blackstone Group (BX) has joined the consortium that is bidding for British media company Informa Plc (INF.L, INFMF.PK). Providence also said Hellman & Friedman L.L.C. is no longer part of the consortium.
The consortium members, currently Providence, The Carlyle Group and Blackstone, reportedly completed due diligence and have agreed on financing terms with a group of bank. The buyout, if succeeds, is expected to become one of Europe's largest takeover since the credit crisis banged last year.
In June, the U.S. consortium approached Informa with 506 pence per share takeover offer. The proposal values the publishing firm at 2.15 billion pounds, or US$4.29 billion, a 21% premium over the 418 pence closing price on June 25, when the speculation was initially reported.
Private-equity firm Hellman & Friedman LLC, which was part of the consortium later withdrew from the group, but reserves the right to participate in the offer, if conditions favors. The suitable conditions for its re-entry can be the lapse or withdrawal of a bid for Informa by the consortium, or the emergence of a rival bid. Hellman & Friedman will also think about rejoining the fray if the board or independent directors of Informa permits to do so.
According to market speculations, Blackstone had been in talks with unnamed firms with a view to forming an alternative consortium to make a rival approach.
Informa, created by the merger of IBC Group Plc and LLP Group Plc in 1998, later on acquired publishers Routledge and Taylor & Francis. In its final results for the year 2007, the company reported net debt of 1.244 billion pounds, sharply higher than 738.4 million pounds last year, emerged from acquisition investments of 598.9 million pounds, including the 497.1 million pounds relating to Datamonitor acquisition.
Some media reports noted that the new member in the consortium will not agree to pay the earlier proposed amount, so the bid price for Informa could go as low as 440 to 450 pence a share. This will value the entire company at nearly 1.87 billion pounds, still a good offer in the middle of uncertain economic conditions.
The private equity firm concluded that there could be no certainty on the offer or to the terms of the offer.
INF.L is currently trading on the LSE at 420 pence, down 30.25 pence or 6.72%, on a volume of 3.12 million shares.
INFMF.PK closed trading at $7.76 on June 5.
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