Informa, takeover and possibly taken over?
publication date: Nov 1, 2006
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author/source: R Taylor
Last month we criticised Informa for announcing their purchase of David Fulton in the media rather than to investors. During our email exchange with Roger Horton, we assumed he was at the Frankfurt Book Fair along with most of the big names in the book world, but he let slip he was actually in the US. We now know why – he was tying up the deal to buy US publisher Laurence Erlbaum Associates (LEA) for £38m. LEA publish 100 academic journals and 200 books for the education and behavioural science markets - the deal will also absorb Psychology Press, the UK joint venture between LEA and Informa set up in 1995. At least this was a big enough deal to merit a stock exchange announcement.
Now it looks like Cinven/Candover-backed Springer Science & Business Media might buy Informa. While it’s early days, Informa admitted they have received the approach. If it succeeds, the company will be a serious competitor to science, technology and medicine (STM) publishing giants VNU and Reed Elsevier. Analysts think that a successful bid will need to be priced around the 600p mark, almost 17 times Informa’s current earnings forecast! The bid is a surprise because Informa looked to be the most acquisitive STM publisher and we had thought that Informa might have made a bid for Springer, rather than the reverse happening.