More on Emap
Emap acquisition of SRH
Scottish Radio Holdings has agreed to an acquisition by Emap at 1,088p, 4% more than the offer SRH recently rejected.
Emap will pay approximately £391m for SRH, but recover £155m by selling SRH’s newspapers to Johnston Press. In effect Emap is paying £236m for SRH’s radio stations.
Emap is paying a hefty premium in order to gain scale. Emap is buying part of SRH’s radio operation at a price that values it at almost twice Emap’s own prospective PE without the acquisition of around 12×, we therefore find it difficult to be as confident as Emap that this acquisition will be earnings enhancing in the short term.
Emap’s price (at 796p) has not moved significantly since we last looked at it, and given that Emap is far larger than SRH, we do not see this acquisition as greatly affecting the valuation.
Random picks: Admiral | Carnival | Enodis | Enterprise Inns | Euromoney | HSBC | ICAP | Land Securities | Legal & General | Unilever