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ACP Magazines on the Block?

23 Feb 2012

Focus is on CVC Asia Pacific who are rumoured to be considering offers for the sale of the ACP magazine section of its business for as little as $300 million, a large fall from the earlier predictions of $800 million.

According to a report in The Australian, $300 million is about three times earnings, and is a large drop from original considerations of eight times earnings at $800 million. CVC Asia Pacific is currently looking to refinance Nine Entertainment Co's considerable debt load.

According to AdNews, Pacific Magazines has been the only publisher interested in buying the ACP business, according to reports. Rupert Murdoch's nephew Matt Handbury has previously expressed interest in buying the business but has since said he could not buy the whole company, but is willing to put resources behind it.

In reaction to speculation that NewsLifeMedia may be an interested buyer, Fusion Strategy managing director Steve Allen said: "There is the potential for a deal there, maybe, but the new CEO of News Limited Kim Williams is not a publishing person and without a head of NewsLifeMedia, the timing is not quite right.

"Of course they should be interested, but without a boss of NewsLifeMedia sitting in a chair right now it would be a bit of a stab in the dark."

Meanwhile, Allen believes the sale of ACP Magazines is unlikely to happen, commenting that other than debt and pressure from hedge funds, there is no reason why Nine Entertainment Co. should want to sell.

Allen said: "CVC Asia might force Nine Entertainment Co. to divest in order to recoup some hundreds of millions of dollars. I don't think this is likely to happen though."

OMD head of print Simon Davies is similarly cautious: "They've said they're looking at all potential options for the company, which is different to saying it's definitely for sale. It's definitely not a fire sale situation.

"While the reported pressures are there, I don't think they're in any rush to sell what is one of the key assets in the group."

The news on the sale price of ACP magazines follows suggestions last week that the proposed launch of Elle magazine in Autumn may be delayed or scrapped.

Source: AdNews & The Australian

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