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June 23, 2008

UBM/Informa deal off

The financial pages of the broadsheets were buzzing late last week with the news that the potential creation of a media powerhouse through the merger of global business media company United Business Media and Informa, an international provider of specialist information and services for the academic and scientific, professional and commercial business communities, had evaporated following the collapse of talks between the two organisations.

A statement on the UBM website prompted reports, which read: "The board of UBM has been unable to agree terms with Informa that would be in the best interests of UBM shareholders. Discussions between UBM and Informa have therefore ceased."

However, the statement also said that “UBM remains of the view that a merged company could deliver significant benefits to both UBM and Informa shareholders, provide enhanced services to its customers, and could become the employer of choice in the global business media market,” clearly indicating that Informa was the prime mover in calling a halt to proceedings.

Writing in the Independent, Sarah Arnott commented: “Sources close to UBM say negotiations on the all-share deal that would have created a global group worth £3.1 billion were finally terminated because Informa's rising share price made the nil-premium deal uneconomic for UBM shareholders.

“The danger was always that UBM's advances, capitalising on investor wariness over acquisition debts and a gently sliding share price, could prompt other suitors,” she continued.

No sooner had the ink dried on Arnott’s story than The Daily Telegraph revealed that her comments were accurate, reporting that Providence Equity Partners and Carlyle Group had confirmed making an approach for Informa.

“The private equity groups are talking to Goldman Sachs, ING and JP Morgan about putting together a £1.8 billion debt package to fund the deal, of which £1.2 billion would be used to refinance Informa's existing debt,” read the report.

The Telegraph cited other possible candidates to include Candover, which along with Cinven owns Springer Science+Business Media, and Apax, which has a large portfolio of business publications.

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