13/12/2007
Letts study guides publisher Huveaux has ended bid talks with all potential suitors, having failed to agree a take-out price with buy-out firm August Equity.
In October, Huveaux, chaired by John van Kuffeler, flagged up approaches from a number of private equity houses. A month later, the company confirmed that detailed discussions were underway with August Equity, which already owns luxury yacht magazine Boat International as well as gaming and digital photography titles, regarding a possible offer. However, following detailed talks, the two parties were unable to agree on a proposal ‘which fully values the company’.
Bidders began to circle after Huveaux, floated six years ago by van Kuffeler with a buy-and-build brief, issued several profit warnings that hit the share price hard. A collapse in advertising spend by pharmaceutical companies, which hit trading at its French medical publishing division, was one of the key reasons behind the disappointment.
Alongside news of the called-off bid chat, Huveaux said trading across the group had been ‘satisfactory’ in the final quarter of 2007, confirming that ‘trading EBITDA [earnings before interest, tax, depreciation and amortisation]’ should come in at £6 million.
Huveaux has taken out £1.3 million of annualised costs that will benefit the business in the long term, though its financials will have to bear restructuring costs as well as aborted transaction costs short term.
Shares in Huveaux slipped back 2.5p to a new 52-week low of 24p this morning, down from a 52-week peak of 53.75p and valuing the business at £36.5 million.
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