Private equity firms move into media as Dutch auction hots up

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The Independent Online

At least four buyout firms are set to make second-round offers this week for Sdu, the €500m (£340m) publisher that is being privatised by the Dutch government.

The deadline is Thursday, according to sources involved in the deal. Candover, 3i, ABN Amro Capital (the buyout arm of the Dutch bank) and Allianz Capital Partners (the private equity business of German insurer Allianz) are all expected to maker offers. The Dutch bank Fortis is running the auction.

The Dutch government, which has set a wave of privatisations in motion, put the publisher of government-related material up for sale in February, and first-round bids were submitted two months ago.

The auction has lagged in part because of the odd configuration of Sdu, which has made it hard for bidders to value. In addition to its publishing business, Sdu has a division that produces laser-engraved passports for the government.

"Like most government privatisations, this has really been dragging out," added a source close to the sale.

Sdu earns around €50m before costs, according to the source, and could benefit from the heightened interest in media among private equity houses.

A buyout consortium including Blackstone Group, Kohlberg Kravis Roberts, Alp-Invest, Hellman & Friedman, Thomas H Lee and Carlyle Group paid €7.5bn for VNU, the Dutch publisher of Billboard magazine and ACNielsen television ratings earlier this year, in one of the largest-ever leveraged buyouts to take place in Europe. Other media companies up for sale include Sportfive, the sports rights marketing group, which is being auctioned for up to €1bn. Chorion, owner of the rights to popular children's characters such as Noddy and the Mr Men, was taken over by 3i earlier this year.

Candover, which owns various media interests, including the research firm Wood Mackenzie, publishing group Springer in Germany, and the Belgian business publisher Bureau van Dijk Electronic Publishing, is thought to be keen to add Sdu to its stable.

Sdu, which is 100 per cent state-owned, is not the only group to have been put on the auction block by the government of the Netherlands. It is getting ready to float Amsterdam's Schiphol airport, and has also said that it is looking at partially privatising Connexxion, the state-owned public transport company. The latter has attracted the interest of the UK rail and bus operator FirstGroup.