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UBM and Informa in Merger Talks
Former NOP owner United Business Media (UBM) is in preliminary talks with publishing group Informa, which acquired Datamonitor last year, over a merger that could create a FTSE 100 global b2b media group worth £3.1bn.
The two companies are very similar in size - at the weekend UBM was capitalised at £1.5bn and Informa at £1.6bn - and both are members of the FTSE 250 at present. Shares in both companies rose on the news, although Informa, with a rise of more than 15% by close on Monday, was the bigger gainer - UBM stock rose by more than 6% at one point but by the close was back to around 2% up.
If the deal goes ahead, analysts are speculating that Informa's Chief Executive Peter Rigby could become Chairman amd UBM's David Levin CEO. The two men are said to know each other well. Informa said it was considering the proposal for an all-share merger, presented by UBM, and that 'There can be no certainty that any transaction will take place', while UBM stressed the discussions were 'at an early stage'.
Analysts said the two groups could achieve cost synergies of £30-50m, and fit well in terms of geographical coverage: UBM is strong in emerging markets like China, India and Brazil, while Informa is strong in the Middle East, Dubai and Singapore.
The announcement may lead to competing bids. Informa has recently been a takeover target, having rejected a bid by Springer Science and Business Media in late 2006. Possible candidates now are Springer's principal shareholders, private equity companies Candover and Cinven; and Apax Partners, which along with Guardian Media Group bought Emap's trade publishing and conference assets last year for c.£1bn, and which recently hired ex-Informa CEO David Gilbertson.
The merger would ease Informa's burden of debt - it had already borrowed substantially for the buys of conference organiser IIR and science publisher Taylor & Francis when it paid £502m for Datamonitor last May, borrowing much more, and subsequent investor worries have led to a decline in share price. However, all three of the acquired firms are said to be performing well.
Informa also owns full service MR firm Informa Research Services.
Web sites: www.informa.com and www.unitedbusinessmedia.com .
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