Springer turns tables with £2.5bn bid for Informa

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The Independent Online

Informa, the science and business magazine publisher, has received a takeover approach reckoned to worth about £2.5bn from the Springer Science group that is owned by the British private equity groups Candover and Cinven.

The bid interest may come as a blow to Informa, which had long hoped to buy the Springer business itself. The City had also been expecting the acquisitive Informa to purchase Springer eventually.

The approach underlines private equity firms' interest in the publishing industry, following the acquisitions of VNU, the world's largest market-research group, and Britain's Incisive Media, earlier this year. A successful combination of Informa and Springer would create a sizeable science journal publisher, but the enlarged group would still remain far behind the market leader, Reed Elsevier.

In a brief statement, Informa said: "Informa confirms that Springer Science & Business Media has made a highly preliminary approach to Informa regarding a possible offer for the entire share capital of the company. Discussions are at an extremely early stage and, consequently, there can be no certainty that an offer will be made."

It did not disclose any indicative takeover price, but analysts pointed to a value of at least 600p a share, which would value the business at £2.5bn. It also has some £750m of debt. Analysts at Numis Securities suggested Informa would fetch up to 660p a share.

Paul Richards, an analyst at Numis, said: "It would be sad to see a business of Informa's quality and prospects disappearing from the UK market. I think shareholders deserve to be compensated for that, so it should command a very good price."

Teather & Greenwood's Conor O'Shea saw little chance of a rival bid, with larger publishers such as Reed likely to face competition problems. "It's very cash-generative, strategic issues are less serious than they seemed a couple of years ago and it's the type of business that can gear up quite aggressively as well as probably taking out a lot of back-office costs - so it's the sort of thing that suits private equity well," Mr O'Shea said.

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