Private equity firms drop bid for Informa

A private equity consortium dropped its £1.9bn (US$3.5bn) bid for UK media company Informa last Friday after Informa rejected a reduced offer, sending Informa shares as much as 9% lower.

Publishing and events group Informa, whose titles include the maritime newspaper Lloyd’s List, said earlier this month that the revised offer of 450p per share significantly undervalued the company.

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 under certain conditions.

“We originally believed the consortium was prepared to make a revised offer but . . . events in the financial markets over the past week mean it was unable to finance an increased bid,” UBS analyst Polo Tang wrote in a note.

“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” recommendation and 550p price target on the stock.

The consortium, with a slightly different make-up, had first approached Informa with a preliminary offer of 506p per share, but reduced it after doing full due diligence.

It said on Friday that it could return if another party bid for Informa, if Informa’s directors agreed, if Informa announced a “whitewash proposal” in response to another offer, or if there was a material change in circumstances.

Informa provides information to various clients on topics such as arts and humanities, social sciences, physical science, technology, finance, law, telecommunications, maritime trade, energy, commodities, and agriculture. It also organises conferences and courses.