Private Equity Media Buyout Targets This Year

With everyone buying everyone else, Citigroup came out with a report last week on possible private equity media targets this year…Jason Bazinet, a media analyst at Citigroup, looked at about 100 global media stocks and decided that most of them are not likely to be targets of a leveraged buyout offer anytime soon.

— Thirteeen media companies that did not make the cut, based on company-specific factors: BSkyB, Charter, Dow Jones, FTD, Google, McGraw-Hill, National CineMedia, Netflix, Reuters, Seat Pagine Gialle, Sogecable, Thomson and Time Warner Cable (out of these, two –DJ and Reuters– are already in play as the reports came out this week).

— This resulted in 11 attractive LBO candidates: Audible, Bankrate, Clear Media, CNET, Ctrip, EchoStar, Focus Media, Meredith, Monster, Priceline, and 51job.

— On Reuters, which received bids today, it said: “Reuters has a high degree of protection from takeover. Within the Articles of Association there are two sets of restrictions – one that requires parties with an interest in more than 15% of the shares to dispose of the shares exceeding 15%. The second is a Founders’ share, which can be used to outvote all ordinary shares should other safeguards fail.

— Audible: The company currently has no debt, and Apax Managers owns approximately 24% of total shares outstanding….We believe management would be amenable to a sale.

— CNET Networks: The company currently has approximately $18MM in debt and a $60MM revolving credit facility, along with $61MM in cash…we believe CNET has scarcity value as one of the few publicly traded pure-play online content verticals, and the company

Comments have been disabled for this post