Reed Elsevier halts private equity talks

Marion Dakers

ISHING group Reed Elsevier has broken off early-stage talks with private equity groups Cinven and Apax over the disposal of its events branch, it emerged over the weekend, following takeover rumours on Friday that sent the shares up sharply.

Cinven and Apax are thought to have approached the firm several months ago about buying the Reed Exhibitions business, which runs almost 500 events a year including property conference MIPIM and the Global Gaming Expo in Las Vegas.

Shares jumped 10 per cent on Friday following talk of an unnamed suitor, with the shares eventually closing 6.5p up at 535.5p.

However, a source close to the company said the talks with the private equity groups had been at a preliminary stage, and were “almost certainly over” thanks to Reed’s reluctance to sell.

Dutch publisher Wolters Kluwer was also named in reports as a possible bidder, after it agreed buy Reed’s Lexis Nexis Deutschland legal database earlier this month.

Reed, which publishes hundreds of consumer and trade magazines including New Scientist and Computer Weekly, said last week in an update that Exhibitions had returned to sales growth in the second half of the year, with an encouraging number of forward bookings for next year.

The division made an adjusted operating profit of £478.7m in the first half of the year, a rise of four per cent on 2009.

However, group margins were down, and the market for biennial conferences is expected to reach a cyclical low in 2011.

Reed Elsevier declined to comment, while spokespeople for Apax and Cinven did not return calls for comment yesterday.