Emap is to sell its struggling French division this year and return the proceeds to investors, in a deal expected to reach close to £400 million.
Emap France, which accounts for about a quarter of the parent company’s profits, is expected to be sold by September, despite trading in line with financial expectations, according to a statement.
The group, established in 1994 and which publishes a French version of Closer, suffered a 23 per cent fall in profits in the six months to September last year, reportedly due to competition from new TV-listings titles, a weak French economy affecting advertising and restrictions on magazine distribution leading to supermarkets refusing to stock titles. Of its 43 titles, Emap France’s TV publications are its most profitable. It is the third biggest consumer magazines publisher in the country.
Emap’s long-term growth target of between 4 and 6 per cent is considered more likely without the French division.
A bid for the whole of the company by a private equity firm is now looking less likely with the removal of one of its saleable assets. Emap’s share price closed up 3.5 per cent to 950.5p on Wednesday, after the announcement.
Citigroup and BNP Paribas are acting as financial advisers to the group on the sale.
Tom Moloney, group chief executive of Emap, said: "Emap has generated significant value by growing Emap France into a leading consumer magazine publisher with a strong position in its market, an attractive portfolio of established titles and a record of successful launches.
"We have positioned the business for growth and are now starting a process aimed at realising value."