LONDON (Dow Jones)--Nordic company Orkla Media's management is leaning towards the sale option for the business, which could generate as much as EUR1 billion for owner Orkla ASA (ORK.OS), people familiar with the matter said Wednesday.
Orkla Media's management met Tuesday and although no definitive decision has been made, the management is leaning in the direction of a sale, these people said.
Oslo-based Orkla Media is the sixth-largest media company in the Nordic region by 2004 turnover, according to Sweden-based media research center Nordicom. The largest Nordic media company by turnover is Finland-based SanomaWSOY Oy (SWSBV.HE).
Orkla Media's single largest asset is Danish daily Berlingske Tidende, which has been slowly recovering from a 2002 fall in advertising revenues. In addition, Orkla Media owns leading local newspapers in Norway and Sweden and has interests in Polish, Ukrainian and Lithuanian newspapers.
Norwegian parent company Orkla - whose businesses span consumer products, specialty chemicals, and asset management - surprised the market in November by saying it would consider structural changes to its media arm, including partnerships and an outright sale.
Orkla had earlier indicated its intention to keep Orkla Media following the acquisition of Berlingske Tidende for 2 billion Norwegian kroner ($298.5 million) in 2000.
Although Orkla Media has strong positions in the print market, the business needs to beef up its online presence, but can't do so alone, Stig Finslo, Orkla Media's director of publishing principles, said earlier.
Orkla Media Seen Drawing Media Cos, Private Equity
If it's put up for sale, Orkla Media is likely to attract a long line of bidders - both financial and corporate - keen to benefit from restructuring the business.
Leading Nordic media companies such as Oslo-based newspaper company Dagbladet and Stockholm-based publishing house Bonnier AB earlier said they would like to acquire some, if not all, of Orkla Media.
Dagsbrun hf. (DB.IC), an Icelandic media company controlled by investment firm Baugur Group (BAUGUR.YY), is also reported to be interested in Orkla Media, while other Nordic media groups such as SanomaWSOY and Norway-based Schibsted ASA (SCH.OS) could also be drawn to the business, people familiar with the matter said.
A long line of private equity firms - including some of the names already in the running for U.K. newspaper publisher Daily Mail and General Trust PLC's (DMGT.LN) regional press unit Northcliffe Newspapers - are also likely to take a look at Orkla Media, these people said.
These potential suitors - who have track records as newspaper owners - include Apax Partners & Co. Ltd. (APX.YY), Candover Investments PLC (CDI.LN), Cinven Group Ltd. (CVN.YY), and Providence Equity Partners Inc., these people said.
For the moment, however, certain unresolved issues remain. One is that Orkla Media's magazines division, Hjemmet Mortensen - publisher of titles such as Appetitt and Vi Menn Fotball - is a joint venture with Denmark-based media group Egmont, and it's possible that Egmont might buy out the remaining 50% in the magazine business, these people said.
Orkla Media's ownership of Polish daily Rzeczpospolita is also divided, with the Polish government a 49% shareholder.
Due to these shared ownership structures, "a lot of people have been scratching their heads on what Orkla Media may be worth," said one London-based banker close to the situation.
He noted that an outright sale of Orkla Media to another large Nordic media company risks running afoul of competition authorities.
Spokespeople for Apax, Candover, Cinven, and Providence either declined to comment or weren't immediately available.
Spokespeople for Baugur Group, Bonnier, Dagbladet, SanomaWSOY, and Schibsted weren't immediately available to comment. No one at Orkla Media could immediately be reached.
Orkla Media in November reported a 10% rise in third-quarter earnings before interest, tax and amortization to NOK54 million and an EBITA margin of 2.7%. Orkla as a whole posted an operating profit of NOK1.09 billion for the quarter ended Sept 30.
Company Website: http://www.orkla-media.no
-By Nicole Lee and Michael Wang, +44 0207-842-9366, +44 0207-842-9386; firstname.lastname@example.org; email@example.com
(END) Dow Jones Newswires