A private equity consortium dropped its 1.9 billion pound ($3.5 billion) bid for British media company Informa amid turbulent credit markets and Informa said it was not in talks with other potential buyers.
The sale would have been one of the largest leveraged buyouts to be assembled since the credit crunch struck in mid-2007 but was delayed by the difficulty of securing financing, and a reduced offer was rejected by Informa.
Publishing and events group Informa had said the offer significantly undervalued the company. The consortium reduced a preliminary offer worth 2.2 billion pounds after it carried out due diligence while credit markets deteriorated.
The shares had been falling over the past weeks as the extent of the credit crisis became apparent and were already trading well under the offer price.
The consortium of Blackstone, Carlyle Group and Providence Equity Partners said they reserved the right to make or participate in an offer for Informa within six months subject to certain conditions.
Informa’s titles include the maritime newspaper Lloyd’s List and the company organises the world’s biggest wireless fair, Mobile World Congress.
On Friday, a spokesman said: “It’s no surprise, given recent events, that funding of deals is more challenging.”
“The board remains confident of the prospects of the business for the year and confirms that Informa is trading in line with the board’s expectations,” he added.
UBS analyst Polo Tang wrote in a note: “We originally believed the consortium were prepared to make a revised offer, but… events in the financial markets over the past week mean they were unable to finance an increased bid.”
“In our view Informa has strategically attractive assets and the Providence approach was the second in two years; we would expect it to remain a consolidation candidate,” he added, keeping a “buy” rating and 550p price target on the stock.
The private equity firms said they could return if another party bid for Informa, if Informa’s directors agreed or if there was a material change in circumstances.
By Georgina Prodhan
(Additional reporting by Varsha Tickoo in Bangalore; Editing by Sue Thomas and Erica Billingham)