The breakup of Emap and Microsoft's bid to acquire Yahoo!
Set to complete
The breakup of Emap, a UK media company, was a protracted affair. In the end, Guardian Media Group (GMG) and Apax Partners, a private equity firm, agreed to buy Emap’s business-to-business operations, but only after three rounds of negotiations. Another bidder, German firm Bauer, walked away with Emap’s radio and consumer divisions.
To complicate matters further, Emap’s director of IR, Catherine Nash, moved to UK telecoms group BT part-way through the process. To fill her place, Emap turned to Joanna Copestake, part of the team at Clare Williams Associates, an IR support company. ‘Emap was keen to appoint someone on an interim basis, as it didn’t know what the future of the company would be,’ explains Copestake.
Talk of a breakup began back in July 2007, when Emap announced that, due to ‘various unsolicited proposals’ it had received, it would undertake a review of the group’s structure with the possibility of a sale or demerger of Emap’s assets.
This process carried on until March, when Emap completed the sale of its business-to-business division, de-listed from the London Stock Exchange and wound down its IR function. ‘It’s only in the last couple of months that we have known the likely outcome and timetable of events,’ explains Copestake.
At one point, Emap announced it would continue running its business-to-business division independently, but changed its mind just a few days later when GMG and Apax came back with a revised offer.
‘Emap ended discussions with all parties interested in acquiring the business-to-business division on December 6, 2007,’ notes Copestake. ‘The board did not talk to anyone again until December 21, when GMG and Apax came back to the table with a significantly enhanced offer.’
So did Emap always expect GMG and Apax to come back with a raised bid? ‘That’s a question for management,’ states Copestake. ‘Of course, it was always possible that someone was going to come back. Put simply, at that time, the offers for the business-to-business division just weren’t compelling enough. Management was happy to carry on running the business as a stand-alone company because it believed that this would deliver greater value for shareholders.’
Ongoing
Another M&A deal that could get messy is Microsoft’s bid to acquire Yahoo!. The internet firm rejected a $44.6 bn cash and shares offer, saying it was too low. Keen to avoid an outbreak of hostilities, however, Yahoo! extended the deadline for nominations to its board. It feared Microsoft, which is believed to own a share in Yahoo!, would nominate board members friendly to a takeover and instigate a proxy battle.
In a statement, Yahoo! said it had extended the deadline to ‘explore all its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest.’
Having bought itself some breathing space, Yahoo! put out new information to investors about the company’s long-term prospects, claiming that a three-year financial plan would boost revenue by almost $9 bn. It also reiterated its belief that Microsoft’s offer ‘substantially undervalues Yahoo!’. Despite its desire to keep things friendly, Yahoo! clearly isn’t going down without a fight.
Details correct at time of going to press.
