British media group Informa Plc has walked away from a purchase of Springer Science + Business Media, saying it could not do a deal in the time required by the debt-laden firm’s private equity owners.
The withdrawal days after the publisher of the Lloyd’s List shipping newspaper confirmed it was considering a takeover of Springer, clears the way for Swedish private equity firm EQT, which senior bankers have said is lining up a billion-pound-plus loan to fund a deal.
It also boosted shares in Informa which shot up 10.4% to 305 pence on the news, after fears of a large rights issue diminished.
Analysts had said Informa would need to raise capital to fund a deal and they said on Tuesday that investors were unlikely to have supported the idea.
Springer Science + Business Media, valued at around €2.6bn including debt, was put up for sale earlier this year by its owners Candover and Cinven.
Both owners declined to comment on Tuesday.
A banker close to the deal had told Reuters last week that EQT was very much in the hunt and that an agreement of some sort could come within 10 days. A source close to Apax told Reuters the firm also continued to monitor the situation but was not in talks at the moment.
“Whilst there is clear strategic logic in combining Springer and Informa … the current environment is not conducive to making such a significant acquisition in the timescale required by the vendors,” Informa said in a statement on Tuesday.
One analyst, who asked not to be named, said Springer and Informa was the “right deal at the wrong time” and said it could still happen in the future.
It is the second time Informa and Springer have ended takeover talks after the British firm rejected a takeover bid by the German firm in 2006.
It also follows similar approaches for Informa after merger talks with UK peer United Business Media broke down, and it rejected an approach from private equity groups in 2008.
Informa, which owns a range of academic and professional publications and runs conferences and courses, also confirmed that trading remained in line with management expectations for the full year.