FRANKFURT/LONDON (Reuters) – The private equity firms Candover (CDI.L) and Cinven [CINV.UL], the owners of German academic publisher Springer Science and Business Media, are considering a full sale of the company, Chief Executive Derk Hannk said on Wednesday.
“For a while we were considered underleveraged, now we are considered overleveraged … a straight sale is the preferred option,” Hannk told Reuters on the sidelines of the Frankfurt Book Fair on Wednesday.
“We are owned by private equity and they have had a very good run for their investment for five, six years,” he said, adding it may be time for new equity.
Candover and Cinven have been looking for up to 500 million euros ($745.2 million) for the sale of a minority stake in the business but initial bids fell short of their expectations earlier this year. [ID:nL8610351]
Progress on the sale has been slow, after private equity firms TPG and EQT, as well as a consortium of Carlyle and Providence, resubmitted second-round offers for 49 percent of Springer in mid-July.
Cinven and Candover declined to comment.
People familiar with the matter said that Carlyle, Providence and Apax were interested in the asset now that a sale of the entire company is on the table.
Apax made a second-round offer for Springer, but did not resubmit its bid along with the other firms.
“Private equity can consider buying the entire company because conditions in the debt markets have improved,” one of the people said.
Neither TPG nor EQT, which has been described as the frontrunner in the process, could be reached for comment.
Apax, Carlyle and Providence declined to comment.
Hannk declined to comment on who was bidding and when a deal could be reached.
Asked if media conglomerate Bertelsmann [BERT.UL]– which dropped out before the second round of bids — would consider making another bid, Hannk quipped: “They may be interested but I think they have their own problems right now.”
Bertelsmann has been hit by a slump in advertising revenue and may post a loss this year.
Springer Science was formed in 2003 when Candover and Cinven merged BertelsmannSpringer with Kluwer Academic Publishing, which was financed with a 810 million euro leveraged loan arranged by Barclays (BARC.L), according to Thomson Reuters LPC data.
The two private equity firms took advantage of the hot debt market to recapitalise the company’s debt in 2004, 2006 and 2007, also via arranger Barclays.
The private equity firms used the debt to pay themselves large dividends, but more than trebled Springer’s borrowings to 3.08 billion euros.