Emap has sold its two main pension schemes to insurance company Paternoster, in a deal that removes an important obstacle for the break up of the media giant’s business assets.
The deal transfers all financial risks and liabilities to Paternoster and makes Emap’s plans for a sell-off of its consumer magazines, radio and professional publishing divisions far more straightforward.
The pension schemes have assets of £170 million, which includes an injection of £40 million from Emap.
Ian Griffiths, finance director at Emap, said the company had decided to sell the schemes before it put the group up for auction in July, but said the move did remove a risk that could have disrupted a sale.
Mark Wood, the founder of Paternoster, which will boost its pension assets to £750 million following the deal, said that the transfer process of Emap’s divisions could have dragged on for months, leaving new employers with the risk of potential liabilities.
Emap has told bidders to place final offers for its divisions by December 3. Its business publishing division is valued at around £1.3 billion, consumer magazines at £600-£700 million and broadcasting assets at around £400 million (see Emap Asks Bidders To Consider Buying Emap Plc Title).
This week, Emap reported its pre-tax profits fell by 16% to £79.7 million for the six months ending September 30, but the group said it was on track to meet its full-year performance expectations (see Emap’s Pre-Tax Profits Drop 16%).
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