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Planned Yellow Pages sale halted

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 28 NZPA - The owners of the Yellow Pages Group have withdrawn from a plan to sell the business, which they bought for $2.24 billion more than three years ago, because they are unlikely to achieve a satisfactory price under current market conditions.

Hong Kong-based Unitas Capital, formerly CCMP Capital Asia, and Canada's Ontario Teachers' Pension Plan bought the directories company in March 2007 from Telecom.

The private equity owners had begun a sale process earlier this year after investigating options to restructure its finances. The owners owed $1.8 billion via YPG Finance Ltd to a number of parties, raised to fund the purchase.

In July, Reuter reported that an information memorandum had been sent to potential buyers, including large private equity firms and Telstra's Australian directories business Sensis.

"Whilst there were a range of interested parties, the Yellow Pages Group shareholders, in conjunction with the banking syndicate, have come to the view that they won't be pursued any further at this time," the owners said today.

The current economic climate did not suit large-scale merger and acquisition activity, and "as a result the expectations of the stakeholders in regard to value are unlikely to be met in the current market".

The banking syndicate would now continue with plans to restructure the company's debt, and planned to stick with the business long-term.

The business had declined in value, according to media reports, to around $1 billion.

In May, Goldman Sachs JBWere was appointed financial adviser to look at options including a sale, a debt restructure and a debt-equity swap.

The company had been fortunate to have a supportive relationship with its banking syndicate, said Yellow Pages chief executive Bruce Cotterill.

"The banking syndicate has been working hard to achieve an outcome that will take Yellow into the future.

"We look forward to working with them to finalise the debt restructure and move forward," he said.

The company was developing a number of initiatives to "ensure our success" in the next few years.

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