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Informa to buy exhibitions rival UBM for £4bn

Informa, the events and business information group, has agreed to acquire UBM in a deal that values that exhibitions operator at £4.3bn including debt.

Investors were divided on the merits of the deal with shares in UBM rising more than 12 per cent while Informa’s stock price slipped more than 6 per cent.

The proposed combination will create the world’s largest operator of business events and exhibitions with a portfolio that spans the Monaco Yacht Show to the Hong Kong Jewellery & Gem Fair.

The two companies explored a combination a decade ago but failed to agree a deal. Stephen Carter, Informa’s chief executive, told the Financial Times that the time was right for the two companies to come together. “The business to business information market is very different today,” he said. “Ten years ago people were questioning whether this was the end of face-to-face contact. But demand for the value of face-to-face connectivity has gone up.”

The two groups expect the deal to generate cost savings of £50m a year.

“We see strategic merits for Informa but only modest earnings per share accretion depending on synergies,” Investec analysts wrote in a research note.

The offer, which values UBM’s equity at about £3.8bn, is supported by the UBM board. The company’s shareholders will receive 1.083 Informa shares and 163p in cash for each of their shares — a premium of about 30 per cent based on the closing share prices of the companies on January 15, Informa said.

Informa shareholders will own about 65.5 per cent of the combined group, with UBM investors holding the balance under the terms outlined in the proposal. UBM shareholders could choose to vary the mix of cash and shares under the terms of the proposed deal, the companies added.

UBM was once a media conglomerate known as United News and Media, which owned television channels and a newspaper portfolio that included the Daily Express. In recent years it has focused on business-to-business events and under Tim Cobbold, chief executive, it has shed non-core assets, pursuing a strategy dubbed “events first”.

Under the terms of Informa’s proposal, Derek Mapp, Informa’s chairman, will become chairman of the combined group while Lord Carter will be chief executive. The board of the combined group is to be made up of seven non-executive directors from Informa and three from UBM.

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