Bertelsmann Drops Out of Springer Auction

LONDON (Reuters) – The auction for a 49 percent stake in German academic publisher Springer Science and Business Media has narrowed to four private equity groups, three people familiar with the matter said on Wednesday.

Apax Partners, TPG Capital, Swedish private equity firm EQT (EQT.N) and a consortium of Carlyle Group and Providence are expected to make second-round bids towards the end of this month, the sources said.

Bertelsmann, Europe’s largest media group, has pulled out of the race, the sources added. Six parties were on the shortlist going into round two, people close to the situation previously told Reuters.

Candover, Cinven and all the bidding private equity firms declined to comment.

Two people said on Wednesday that Germany1 Acquisition Ltd, a special purpose acquisition company listed on Euronext Amsterdam, was still interested in Springer, but that it was unclear whether the company will progress further.

Springer’s private equity owners Candover (CDI.L) and Cinven are considering selling the stake as one of several options for tackling high looming debt payments Springer is unable to meet.

The sale comes as many in the private equity industry struggle with falling revenues in the companies they own while debt financing conditions deteriorate.

In a twist to normal auction practice, Candover and Cinven are looking to raise 500 million euros ($714.4 million) and are asking interested parties to bid on the stake in the company they want in return. But banking sources have said that offers may fall short of this figure.

Bertelsmann and Germany1 also declined to comment while Springer was not immediately for comment.

(Reporting by Victoria Howley and Simon Meads. Additional reporting by Christoph Steitz; editing by Elaine Hardcastle)