Guardian Media Group has reportedly turned down an offer for its 50.1 per cent stake in Trader Media Group which would have netted the company £470m.
According to the the Financial Times the offer, from private equity group Apax, valued TMG at £1.5bn (including £560m of debt) – so slightly more than than the £1.35bn it was valued at (including debt) when GMG sold a 49.9 per cent stake in the business to Apax in 2007.
The FT reports that instead a public offering is on the cards for TMG next year which could value it at £2bn.
Last year, GMG's Guardian News and Media Division made an operating loss of £30.9m, down from £44.2m in the previous financial year. GMG is two years into a five-year financial plan to reduce losses at The Guardian.
According to the FT, the plan is to get Guardian losses into single-digit millions.
GMG currently has £253.7m in cash and investments to cover Guardian losses with and it also has a 32.9 per cent stake in Top Right Group which will return an unknown amount back to GMG when it is sold at some point in the next three years.
Trader Media Group scrapped the print edition of Auto Trader in June and now makes most of its money from its classified car ads website.
The fact that Trader Media Group appears to be increasing in value is good news for the Scott Trust which owns GMG and is required to safeguard Guardian journalism perpetuity.