Guardian group cashes in with £1.5bn Auto Trader float

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The Independent Online

GMG said it wanted to diversify its holdings and Trader Media Group represented too large a part of its assets. The money raised from listing a minority stake will be used to buy other media businesses.

Apart from the two national newspapers, GMG publishes the Manchester Evening News and 40 smaller local newspapers. The group, which is owned by a not-for-profit trust, also has a radio business that includes the Smooth FM stations in London and the North-west.

Nick Castro, the finance director of GMG, said: "We've got an enormously valuable asset [in Trader Media]. We felt we should spread our investment portfolio and rebalance it."

GMG will float a minority stake, of between 25 and 49 per cent, in Trader Media, which publishes more than 70 weekly titles focused on classified ads of vehicles for sale.

Analysts suggested the listing of Trader Media would give it an enterprise value of about £1.5bn.

GMG's last accounts put debt in the Trader Media unit at £391m at March 2005, but that figure will have decreased since then. Turnover was some £280m for the 2004-05 financial year, with an operating profit of £117m.

GMG bought out the 52 per cent of Trader Media it did not already own, from its private equity partner, in 2003 in a deal that gave the business an enterprise value of £1.1bn.

Within Trader Media, as well as Auto Trader magazine, its publications include Bike Trader, Truck Trader and Top Marques. The autotrader.co.uk website is reckoned to be one of the 20 most popular sites in the UK.

Mr Castro denied suggestions that GMG wanted to create a cash "dowry" for The Guardian.

"We have no intention of diverting out of other activities to create a big pot of money for The Guardian. We think it is best to have a portfolio approach," Mr Castro said.

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