3i Faces Creditor Takeover of VNU Biz Media Europe

LONDON (Reuters) – British private equity firm 3i Group Plc (III.L) is facing a possible creditor takeover at VNU Business Media Europe, the Dutch media business it bought at the height of the buyout boom, The Times reported on Wednesday.

3i, which will publish a trading update later on Wednesday, bought the business-to-business publisher for 320 million euros ($422.5 million) in late 2006, but VNU is believed to be close to breaking its banking covenants, the newspaper reported.

The Times cited a source close to 3i as saying negotiations with banks are continuing, but the private equity group will have to put fresh money into VNU or allow creditors to take it in a debt-for-equity swap.

The report said sources close to VNU said 3i has ruled out putting in more money.

But it said the fund denied and sources close to 3i said it would like to put more money in, although such a move has not been put to the fund’s credit committee. (Reporting by Matt Scuffham; Editing by Andre Grenon)