Informa Price Cut as Blackstone Joins Bid

LONDON (Reuters) – Private equity firm Blackstone has joined a consortium bidding for Informa, but an industry source said the group was no longer prepared to pay its original price for the British publishing firm.

Carlyle Group and Providence Equity Partners said Blackstone had joined their consortium, which first approached Informa for a buy-out at 506 pence per share or a total of 2.15 billion pounds ($3.8 billion).

But the consortium was no longer was prepared to pay that price, the industry source said on Thursday, and even a price around 470 to 475 pence per share was deemed too high.

The consortium and Informa declined to comment.

Informa shares dropped 4.3 percent to 431 pence per share at 0752 GMT, underperforming the DJ Stoxx media index which was 1.1 percent lower.

Press reports speculated the bid price could now be as low as 440 to 450 pence a share, which would value the offer at 1.87 billion pounds — still making it one of the largest leveraged buyouts since the credit crunch struck last year.

Blackstone had first formed a rival bidding group with the Investment Corporation of Dubai, but decided to switch sides once Dubai had pulled out of the partnership, a source familiar with the situation told Reuters on Wednesday.

Carlyle Group and Providence Equity Partners secured a financing package to back the buyout of the British group, senior banking sources told Reuters on Tuesday, improving the chances of a successful sale.

The two have assembled a group of around 12 banks to provide a leveraged loan of about 1.5 billion pounds ($2.7 billion) that will finance the purchase, the banking sources said.

By Douwe Miedema

(Additional reporting by Kate Holton; Editing by David Holmes and Quentin Bryar)