Media Property Shake Up As Hollywood Reporter And Other Nielsen Properties To Be Sold To News CommunicationsSubmitted by Tyler Durden on 11/11/2009 12:11 -0400
With content about to become valuable once again, courtesy of Murdoch's initiative to make relevant information scarce (and Google inaccessible), M&A fever is gradually picking up in the media space. The latest development comes from The Wrap which reports that Hollywood Reporter and several other Nielsen Company publications are set to be sold to privately held News Communications (note: not Corp). Other publications on the block include Billboard, Backstage, Adweek, Brandweek, Mediaweek and Editor & Publisher. What is odd is that the entire package, which focuses on the B-to-B crowd, has seen a dramatic drop off in revenue and net income, courtesy of what once was branded a recession, and now is merely yet another Fed inflated omni-asset bubble. As such it is very unlikely that the Nielsen PE sponsors, which acquired the firm in 2006, will make much if any profit on the divestiture.
Investors with $300 million burning a hole in their pocket will be able to pick up the triple hook rated piece of media paper at a 14.5-14.75% yield. We say no way jose.
The expectation is that Nielsen Co. (Caa1/CCC+) will be coming to market momentarily to take advantage of "demand" for junk debt. Apparently the issue will be $300 million maturing in 5 years. We say the OID will be 25 points and we also take the under.