FHM publisher 'in move to set up loans for bidders'
FHM publisher Emap is today said to be in talks with banks to offer loans to bidders interested in buying its businesses.
The move demonstrates how serious Emap is to sell off its assets, as it attempts to ensure bidders, particularly private equity firms, are not excluded from the auction due to recent turmoil in credit markets, the Sunday Telegraph said.
Bidders can then use the loans to finance their acquisitions of Emap’s assets.
The practice, which is known as “stapled financing” as the loan terms are literally stapled to bid documents, is commonly used by private equity companies when they sell on assets.
It is now being used by listed companies to try to get deals off the starting blocks as they try to avoid the tougher market conditions due to a tightening by lenders.
Emap, which also publishes Grazia and Heat and owns radio stations Magic and Kiss, is understood to have received strong interest for all three of its divisions – consumer magazines, business-to-business and radio.
The Observer reported today that Finnish publishing giant Sanoma has entered the fray with an interest in the firm’s consumer division.
Sanoma Magazines is one of largest consumer magazine publishers in Europe, publishing 300 titles in 13 countries, including Marie Claire and Cosmopolitan.
It claims to be the market leader in Belgium, Bulgaria, the Czech Republic, Finland, Hungary, the Netherlands and Russia, and already has an established relationship with Emap through its licence to publish FHM and Top Sante in Europe.
The news comes just days after the US publisher of Maxim, private equity firm Quadrangle, was reported to be also looking at getting its hands on Emap’s consumer magazines arm. Other potential bidders have included French publisher Lagardere.
Peterborough-based Emap, which has struggled in tougher advertising markets for its consumer magazines, said in July it would consider a possible sale or demerger of parts of the company in a strategic review of the firm.
Indicative bids for Emap’s three business units are due this month and the company sent out information to bidders last week.
The group’s business-to-business division, home to trade titles including Construction News and Retail Week, is understood to have attracted interest from private equity firm Apax Partners, United Business Media and Informa.
Meanwhile, the UK’s biggest commercial radio group GCap Media and Global Media Network, which recently bought out Chrysalis’ radio arm, are reportedly interested in buying the radio unit.
