Guardian Media Group (GMG) and private equity firm Apax hope to generate up to £2bn from the sale of the publisher of Auto Trader, Trader Media Group (TMG), with the two companies hoping to conclude a possible deal within the next 18 months.
TMG was valued at £1.35bn when Apax took a 49.9% stake in 2007. Sources close to the situation said yesterday that it was not unreasonable to expect a sale “within a year or a year and a half” and confirmed that the company had held meetings with a number of banks to discuss options but so far no bank has been hired to lead a sale.
Managers at TMG have ordered a review of the business with a focus on the best option for offloading the group and it is understood that Apax is largely ambivalent about whether the company is floated, a trade buyer is sought, or if another private-equity firm takes control.
Private equity sponsors typically like to recycle businesses they invest in after about five years and a spokesman for GMG said talks were at an early stage, adding: “TMG is a very strong business and well advanced in its digital transition, which makes it a valuable asset for GMG. No decisions have been made about either the timing or nature of our exit from this investment.”
Auto Trader has undergone a widespread transition since the deal, with the digital edition of the paper taking precedence. About 90 per cent of profits in the year to March came from online operations, up from 70 per cent two years earlier – Autotrader.co.uk has 10 million monthly users, compared with the 136,000 weekly circulation of the print edition.
Last month, TMG wrote off £463m of the value of Auto Trader magazine. GMG lost £171m in the 12 months to March.
Source: The Independent