LONDON (Reuters) – Private equity firms pursuing Springer Science and Business Media have been asked to resubmit bids after second-round offers fell short of expectations, people familiar with the matter said.
TPG, EQT and a consortium of Carlyle Group and Providence submitted bids for up to 49 percent of Springer, but all fell “significantly short” of the sellers’ target price of 500 million euros, the sources said.
Owners Cinven and Candover (CDI.L) have asked the three groups to resubmit bids, one of the sources said.
“There are still conversations ongoing that are capable of producing a transaction,” said one source close to the deal.
Cinven and Candover declined to comment.
Apax Partners did not submit a bid but remains in discussions with Springer’s private equity owners Cinven [CINV.UL] and Candover (CDI.L), two sources said.
The structure and the price level of the bids is unclear, but two of the sources said a valuation of 350 million to 380 million euros (($489.2 million-$531.2 million) for a 49 percent stake was a reasonable estimate.
Candover and Cinven had initially asked potential buyers to bid on the stake they would want in return for 500 million euros, up to a maximum 49 percent.
Proceeds would be used to tackle high looming debt payments Springer is unable to meet.
The sellers now have other options as equity and high-yield bond markets recover, though the sale of a minority stake remains the favoured plan, one source close to the deal said.
The sale comes as many in the private equity industry struggle with falling revenues in the companies they own while debt financing conditions deteriorate.
(Additional reporting by Victoria Howley; editing by Douwe Miedema and Elaine Hardcastle)