Future snaps up rival publisher Highbury for £32m
Tuesday 15 February 2005
Future Publishing, the owner of titles such as Mountain Biking UK and PC Gamer, bought its smaller rival, Highbury House, for about £32m yesterday in a deal which will make it the UK's third largest magazine publisher.
Future, which owns 90 magazines and websites, said it would pay 10 of its shares for every 83.25 Highbury shares. It also offered a partial cash alternative which will pay out 10p a share to Highbury's investors, up to a maximum of £10m.
Highbury owns more than 200 consumer, business-to-business and client titles including Fast Car magazine. The Future offer is more than 35 per cent above the group's share price before it announced it was in bid talks three weeks ago.
Future's chief executive, Greg Ingham, said: "Highbury is a business that we know well and have followed for some time. We consider that it represents an opportunity to acquire a significant asset at a fair price. Whilst the business has faced some challenges in recent times, we are confident that we can integrate the titles and teams, and improve the financial performance and enhance shareholder value."
Although Highbury has been loss-making in recent years, Mr Ingham said the consumer titles were a good win for Future, helping it "leapfrog" the BBC to become the third largest UK magazine publisher.
Mark Simpson, the chief executive of Highbury, said: "I am confident the offer will also be welcomed by Highbury's other stakeholders. In particular, our employees should benefit from the enhanced career opportunities that a larger, more stable group can offer." Future said the deal will generate £4.5m of annual cost savings, starting in the first full financial year, which begins in September. It said there would be one-off integration costs of £4m.
Shares in Highbury rose 1.3 per cent to 9.5p yesterday, giving it a market value of £30m. Future shares closed down less than 1 per cent at 82.5p, giving the company a value of £268m.
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