(Sharecast News) – Ascential slumped on Thursday following a report that three major bidders for its consumer data arm have walked away from the auction.
The company said earlier this year that it was planning to sell the business, known as WGSN, as part of a break-up plan announced in January. It began talking to potential bidders in April.
However, Reuters cited people familiar with the situation as saying that in recent weeks, three bidders walked away from the auction without making a formal offer, although there is still at least one potential buyer.
European private equity firm Apax Partners was the latest to exit the process, joining BC Partners and US media group Hearst Communications in dropping its bid for the business, which provides data that helps brands understand consumer trends, sources told Reuters.
Although the talks could yet be restarted, their exit deals a blow to the auction and highlights the tough environment for dealmaking.
Several people involved in the process had rated Apax as a likely buyer after it conducted extensive work on a bid and as a former owner of the company that is up for sale.
Sources told Reuters that Apax stopped working on the deal before last week’s binding offer deadline because it thought the price being asked was too high.
Ascential’s board wanted more than £700m to return cash to shareholders and put money into its loss-making e-commerce unit, one of sources said. But bidders including Apax value the business at less than that, partly because of WGSN’s modest growth prospects.
It was understood that conversations with Apax and others could restart if Ascential lowers its valuation.
Sources told Reuters that JPMorgan, which is advising Ascential on the WGSN sale, is now facilitating one-on-one talks with potential bidders such as California-based private equity firm STG.
At 1220 BST, Ascential shares were down 4.9% at 219.20p.