GMG to take control of Trader Media in £500m deal

by Claire Billings,, Brand Republic 07-Apr-03, 08:30

LONDON - Guardian Media Group is considering taking control of Trader Media, the publisher of classified magazine Auto Trader, in a deal that would see it pay £500m for the 52% of the company it does not already own.

The deal would value Trader Media, which is a joint venture between GMG and venture capitalist BC Partners, at around £1bn.

BC Partners bought its 52% share of Trader Media in 1998 from John Madejski, who jointly owned Auto Trader's regional titles with GMG.

GMG and BC Partners merged their two halves of the business in 2000 to form Trader Media. A clause in the contract gave BC Partners the right to leave the business after four years, but GMG has a pre-emptive right to offer to buy out its partner.

GMG, publisher of The Guardian, The Observer and the Manchester Evening News, is understood to be keen to take control of the company, which had sales of £232.5m in 2002 and underlying profits of nearly £60m, to boost its financial position. It wants to continue its expansion of its commercial radio operation following its purchase last summer of Jazz FM for £44.5m, as well as invest in its national newspapers.

GMG was first reported to be interested in taking control of Trader Media at the time of the Jazz FM acquisition. GMG chairman Paul Myners said the company was "limbering up" for a possible bid for the 52% share in the business, or that it would sell its 48% to BC Partners.

GMG has appointed advisers NM Rothschild to handle negotiations.

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