UK’s Guardian Media to divest stake in Trader Media to Apax Partners

UK's Guardian Media Group Plc (GMG), publisher of The Guardian and The Observer newspapers, has agreed to sell its 50.1-per cent stake in joint venture Trader Media Group to partner and leading private equity firm Apax Partners LLP.

Trader Media is well-known in the UK for its Auto Trader branded website dealing with car sales and enables its users to access the website from PCs, mobiles and tablets and provides them with all the required information for purchasing a car.

The proposed stake sale follows GMG's disposal of the other 49.9-per cent interest in Trader Media to Apax in 2007 for £675 million.

''The Trader Media disposal, subject to regulatory approval and final completion, forms part of a five-year digital-first strategy that has delivered increasing advertising revenues, improved circulation figures and enhanced investment returns as GMG focuses on its core assets,'' the company said in a statement.

Although the financial terms of the transaction have not been disclosed, analysts estimate the value of the deal in the range of £600 to £700 million.

London-based GMG is a leading British media organization with its core business Guardian News & Media, Auto Trader and various local newspapers and other media businesses in the UK.

Guardian News & Media reported an operating loss of £31 million for the year ended March 2013 that was an improvement over last year's £44 million loss. It is expected that the current sale will secure the future of the loss-making businesses.

GMG's chief executive officer Andrew Miller said: ''This proposed transaction makes strategic sense as we focus GMG's activities on award-winning digital and print journalism.''

''On completion, the sale-proceeds will strengthen our balance sheet and position us for further investment and growth in our core business,'' Miller added.

GMG's sole owner The Scott Trust Ltd has given its full support to the proposed deal.

''Once completed, this deal will make GMG a very well-capitalised media organisation with the financial flexibility to navigate the rapidly-changing media environment, where our flagship titles are proven pioneers of digital and print innovation,'' Neil Berkett, chair of the GMG Board, said.

Apax, also London-based, is a British private equity and venture capital firm with eight other offices in Europe, the US and Asia. The firm with assets worth $20 billion is ranked the seventh-largest private equity firm globally.

Apax invests in business sectors such as telecommunications, information technology, retail and consumer products, media, healthcare and business services.

Trader Media has over 11.5 million unique users per month, carrying out over 139 million searches on more than 360,000 new and used vehicles. The group's annual revenue is around £252 million.

Bank of America Merrill Lynch acted as financial advisor to GMG on the deal while Apax was advised by JP Morgan.