Media group Emap said today it was inviting bidders for its business-to-business division also to take over the company's Plc status to smooth the return of cash to shareholders should the other assets be sold first.
Emap said the overall sale process was still on track with the board encouraged by progress and finding good interest in all parts of the business-to-business, radio and magazines group from trade and private equity suitors.
The upbeat update on progress helped lift Emap shares by 2.2 per cent to 855 pence - one of the best performances in the sector at a time when the DJ Stoxx European media index was trailing its opening level by 0.12 per cent.
"This is clearly positive given soggy markets and deals getting pulled all over the shop," said Panmure Gordon analysts as they retained their "buy" rating on Emap's shares. Emap said that as part of its review process it was asking those interested in buying its B2B arm to consider including the acquisition of Emap, should an outcome of the review result in B2B being the only business remaining within Emap.
The request means a successful bidder of the B2B assets would also take on the staff, technology and infrastructure involved at a group level. "This is being proposed purely as a possible way of enabling the return of the cash, including the proceeds of any potential disposals, to shareholders in an efficient manner," Emap said.
UBS analysts said the move suggests Emap plans to dispose of its consumer magazine and radio assets first. Seymour Pierce analyst Charles Peacock said: "While a technical development, which may enable an efficient means of returning cash to shareholders, we interpret this as a sign that prospects are encouraging for a sale of the radio and magazine businesses, as well as B2B division."
An update on Emap's progress with its potential break-up was expected to come on Tuesday with its first-half results. Under takeover rules, Emap had to clarify its position once a change of control proposal was being considered and its update on Friday noted that a formal offer process is now underway.
"The board confirms it has not received any approach to acquire Emap as currently constituted and that the commencement of the offer period is not a consequence of any proposal received to date," the company said.
The average break-up value of Emap's shares is seen at 1,034p with a 925-1,167 pence range. Sources familiar with the situation have said that each of Emap's three divisions attracted at least five bids, although it is not clear how many of these have gone through to the second round. Emap's chief executive Tom Moloney quit suddenly in mid-May, fuelling speculation the company would become a bid target. Two months later, Emap said it had received approaches, prompting it to consider a sale, demerger or break-up.