Candover eyes Emap France

Candover, the private equity group, is considering launching a bid for Emap France, the French consumer magazine publisher owned by listed UK media group Emap, according to a report in the Financial Times. Together with Cinven, Candover already owns Germany’s Springer Science & Business Media.

In February, Emap announced that the group had initiated a formal process for the sale of Emap France following the weak performance of the French unit. In 2005, Emap France recorded sales of £300m, down 7% from £322m in 2004. Operating profit fell 12% to £50m, with operating margins down from 18% to 17% mainly due to margin erosion at TV listings titles Télé Star and Télé Poche.

Candover’s experience with media transactions has been positive in the past. In June 2005, a refinancing of shareholder loans for Springer Science & Business Media provided Cinven and Candover with an opportunity to recoup their entire equity investment, while holding on to a stake of approximately 90% in the publisher.

Apparently, the refinancing valued the Germany-based scientific, technical and medical publisher at €2.5bn–€3bn. Springer Science & Business Media emerged in September 2003, following two transactions with a combined value of €1.65bn.

A bid by Candover is likely to be rivalled by trade buyers, though. Gruner + Jahr, the German publisher that is part of the Bertelsmann group is closely monitoring the situation surrounding Emap France, according to a spokesperson.

Mondadori, the Italian publisher controlled by Silvio Berlusconi’s family, has also confirmed its interest in Emap France.

The announcement followed a report in Italian financial daily Finanza e Mercati saying Mondadori had hired Citigroup and BNP Paribas for advice on Emap France.

The sale process for Emap France is expected to complete in the first half of the group’s 2006–07 financial year. It is expected that surplus net sale proceeds will be returned to shareholders as soon as practicable, given the board’s intention to maintain an efficient capital structure.

Citigroup and BNP Paribas are acting as financial advisers to the group in relation to the sale process.

Alex Wessendorff