Emap Reported To Be Close To US Sale

Media group Emap is understood to be in discussions to sell off its US consumer magazine business, Emap USA, as the division continues to lose the company money. According to a report in this morning’s Financial Times, Emap has received ‘several’ approaches from interested parties and is understood to be pursuing these offers.

Emap bought the business, then Petersen, at the very end of 1998 for £720 million (see EMAP Makes £720m US Move). It was a bold move of expansion into the US market and was orchestrated by chief executive Kevin Hand. However, the magazine business has since turned in a poorer than expected performance, particularly in terms of ad revenues. Profits have also been dented by new launches and the US launch of men’s lifestyle magazine FHM, which has cost £12 million so far.

It is likely that Emap will make a loss on any sale of Emap USA, with ABN Amro valuing the group at around £359 million. ABN believes that a sale of the business might alleviate profits worries short-term and boost EMAP stock, but it could also leave the company exposed to “two main mature European markets, lowering the expected long term growth potential”.

At 10:30 this morning Emap stock was down 20p at 852p.

Emap: 01733 568 900 www.emap.com

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