News
02/02/2007 - Yellow Pages New Zealand expects 10 bids
As many as 10 parties are expected to lodge indicative bids for Telecom's Yellow Pages directories business in time for today's deadline.
Australian telecommunications company Telstra and overseas private equity firms are set to feature.
Market sources yesterday suggested offers would need to be around $2 billion to make the second round of bidding. Telecom's adviser, investment bank Goldman Sachs JBWere, is expected to draw up a shortlist of between three and six bidders within two weeks.
Shortlisted bidders would then move to due diligence, including access to confidential information, site visits and management meetings. A sale could be completed as soon as late March or April. Goldman had told potential bidders that if they planned to team up, they needed to do so before lodging their initial offers.
Telstra, aiming to beef up its own directories business Sensis, is expected to bid. However, some observers question whether Telecom would be prepared to sell to its bitter rival, or allow it to do due diligence.
Interest from Seven Media, a joint venture between Australia's Seven Network and American private equity fund Kohlberg Kravis Roberts & Co, is also likely.
Other private equity funds, including the Washington DC-based Carlyle Group, CVC Capital Partners, CCMP Capital, Pacific Equity Partners, Nikko Principal Investments and Providence Equity Partners, could also be prospective bidders.
Yellow Pages consists of the yellow and white pages in print and online, the 018 phone directory service, local directories, New Zealand Retirement Guide and New Zealand Tourism Online. It has 600 staff.
Telecom has told potential buyers that Yellow Pages' revenue will rise 13 per cent this year to $280 million, with earnings up 8 per cent to $160 million.
Chief executive Theresa Gattung said Telecom was selling because directories businesses were moving to the Internet, where big international players Google and Yahoo would dominate.
Some analysts question whether Telecom should sell a strong business that it could use as a launch pad for an online media push.
http://www.stuff.co.nz/3948034a13.html
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