Informa-Springer in talks

["Okerson, Ann" <ann.okerson@yale.edu>]

See:  Financial Times:

http://www.ft.com/cms/s/0/0a6822aa-d885-11de-b63a-00144feabdc0.html

****

See below the article in the online Guardian:

http://www.guardian.co.uk/business/marketforceslive

Informa shares sink on news of Springer talks

Informa shares are down sharply this morning after the media 
company confirmed it is in talks to buy private-equity held 
Springer Science and Business.

Candover and Cinven have been looking to offload the German 
academic publisher or at least part of it, initially giving the 
debt-ridden business a valuation of around Euros 1BN.  Informa, 
the publisher of Lloyd's List, has now confirmed a report in the 
Financial Times that it is in discussions with Springer's
shareholders about acquiring the company.

It says in a statement to the stock exchange:

"Informa has been given access to due diligence materials to 
enable it to be in a position to make a formal proposal to the 
shareholders. There can be no certainty agreement will be reached 
with the shareholders on terms that are acceptable to the board 
of Informa.

"Combining Springer and Informa would bring together two highly 
respected and profitable academic publishers that would be 
positioned to take advantage of the opportunities in their core 
fields of Scientific, Technical and Medical (STM), and Humanities 
and Social Sciences (HSS), respectively. On the right terms, an 
acquisition of Springer would be an important strategic step for 
lnforma and one that would be expected to generate significant 
value for Informa shareholders."

The publishing and conference group added that a tie-up would be 
expected to "generate significant synergy benefits from 
rationalisation of the combined cost base plus improved marketing 
and operating efficiencies." Because the Springer business has 
strong cash generation it would enhance Informa's cash and 
earnings visibility, the company added.

The market was not so sure about all those benefits, however, and 
shares in Informa were down at 10.30am.

And despite reports Springer was now looking like it could go for 
much less than its owners had orginally hoped - initial offers 
are said to have come in at around Euros 400M - there were still 
questions over whether Informa could come up with the funds. 
Analyst Gareth Davies at Investec predicts only limited 
anti-trust issues and says a deal would make strategic sense by 
"combining two strong academic publishing business".

But he also comments:

At a potentially attractive price, we think this is a deal 
Informa management have to consider given potential synergies and 
quality of asset.

...That said, given gearing at Springer Media in combination with 
Informa's existing debt, financing looks to be a stretch.

Copyright 2009

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