Guardian Media Group and private-equity firm Apax have agreed to pump more money in business publisher Emap to aid acquisitions.
The Sunday Times reported yesterday that GMG had “pledged … to support an acquisition drive with fresh funds”.
A source close to GMG told Press Gazette the agreement to back Emap buying other business titles was ‘in principle’ only at this stage and that there were no potential purchases in the pipeline and no money had yet been committed.
The ST story added: ‘The pair [GMG and Apax] are gearing up to support an acquisition drive with fresh funds after rejecting proposals to relax covenants on Emap’s £700m of debt because it would be too expensive”
Press Gazette understands that the discussions on banking covenants are still on-going so no decision has yet been reached on whether new financing would be necessary.
Last month, David Gilbertson, the chief executive of Emap, was moved to offer a series of assurances about the business publisher’s prospects following the revelation that failure to renegotiate its banking covenants could place “significant doubt” on its future.
He told Press Gazette Emap was operating well within its covenants and that there was “no jeopardy” to its trading after accounts released for Emap for the 12 months to the end of March revealed that parent company Eden Bidco, a joint venture between Apax and GMG, risked breaching its agreements with lenders should the economic climate deteriorate and Emap’s profits fall “materially below the level seen in the first half of 2009”.
Apax and GMG paid almost £1.1 billion to buy Emap in March 2008. Just 12 months later, Apax wrote down the value of its £300m investment to zero because of the recession.
GMG, which also owns The Guardian and The Observer, confirmed last month that it has held “exploratory talks” with rival publishers about selling the Manchester Evening News and its other regional newspapers.