Informa snubs new private equity bid

Informa rejected a £1.9bn cash takeover bid yesterday after its private-equity suitors cut the price from an earlier indicative approach for the publisher.

Providence Equity, Carlyle Group and Hellman & Friedman approached Informa in late June with a proposal to buy the company for 506p a share in cash, valuing it at £2.15bn. But after looking over the company's books, the buyout firms, now including Blackstone in place of Hellman & Friedman, submitted a firm offer at 450p a share yesterday.

Informa had been prepared to discuss a deal at the higher price and said that the potential buyers' response to the two-month due diligence period had been "positive". Providence and Carlyle are said to have assembled a group of 12 banks to provide a leveraged loan of about £1.5bn to finance the purchase. A deal would be one of the biggest leveraged buyouts in the UK since the credit crunch started more than a year ago.

In a statement released after the market closed, Derek Mapp, the chairman of Informa, said: "The board believes that the revised offer significantly undervalues Informa. Informa is continuing to deliver growth across the business even in the face of a weaker economic environment."

The company owns more than 2,000 trade publications and organises more than 10,000 conferences a year. Informa said its subscription-based business, limited reliance on advert-ising and diverse geographic spread meant it was well placed to weather the slowdown in the media sector.

Informa shares fell 7.9 per cent yesterday on speculation that the offer would be reduced. The shares closed at 414.5p, valuing the company at £1.76bn.