Emap Break-Up Poised to Start With Sale of Radio Stations and Magazines

By Douglas Friedli

MEDIA group Emap will this week reveal its break-up plan is making progress, with its radio stations and consumer magazines tipped to be sold before its portfolio of trade titles.

The company, which owns radio stations Clyde and Forth, will on Tuesday reveal its results for the six months to September in the midst of an auction which could be completed within six months.

Emap has had interest from buyers in all parts of the business, including the radio stations, which have attracted interest from Vitruvian, a private equity firm, and former ITV boss Charles Allen.

Vitruvian has teamed up with US buyout group Veronis Suhler Stevenson and former Chrysalis boss Phil Riley, while Allen hopes to get the stations through his Global Radio vehicle. Guardian Media Group and GCap, owner of Capital Gold, may also be interested in the radio assets, which are valued at up to GBP 600m.

Emap last week said it would ask bidders for its profitable trade journals, including Broadcast and New Civil Engineer, to consider a bid for the holding company as well.

UBS analyst Ian Whittaker said the move signalled Emap was close to finding a purchaser for the radio business, which includes Kiss and Magic FM, as well as former Scottish Radio Holdings stations, and its consumer magazines such as Heat and FHM. The deadline for the latest round of bids is understood to be the end of November.

Chairman Alun Cathcart will on Tuesday reveal a steady improvement in group performance. Emap’s radio stations are believed to have enjoyed a better second-quarter performance, while its consumer titles are in line for an improvement in the current six months.

Emap’s business-to-business publishing arm, home to titles such as Construction News and Retail Week, saw a 5 per cent hike in revenues. The division is seen as the most desirable part of the operations and is understood to have attracted interest from private equity firms Apax Partners and Candover, and publishers United Business Media and Informa.

But Cathcart has faced sniping from some analysts who believe the break-up is not taking place fast enough. Cinven, the private equity group, is understood to have pulled out of the bidding for Emap’s consumer titles.

Patrick Kirby, a media analyst at Deutsche Bank, said: “The question for Emap remains whether to press on for a full break-up and then dispose of the consumer assets, even if at lower than originally expected valuations, or whether to reconsider a partial sale, return the proceeds to shareholders and refocus the group around a retained set of assets, potentially under new management.”

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