Magazine publishers, Highbury House Communications, has confirmed that it has reached agreement over the proposed takeover bid by Future, creating the UK’s third largest consumer magazine group, in a deal said to be worth £96.5 million (see Future To Bid For Highbury).
The agreement will see titles such as Real Homes and Fast Car added to Future’s existing portfolio, which includes Guitar, Maximum PC and Cross Stitcher. The combined Group will overtake the BBC’s magazine division, to take third place in the consumer magazine market.
Future Directors believe that the deal will result in annual cost savings of at least £4.5 million, resulting from operational efficiencies such as securing enhanced supply terms, including paper, print and cover-mounts.
Moves to eliminate any dual functions at the head offices of both Groups are also anticipated, although Future said today that no decision had been regarding possible job cuts.
In a statement released this morning, Future said that it would continue the process of divestment of certain Highbury business units, including the announced Bcom disposal, so that it could focus on its consumer magazine portfolio (see Highbury Sells Business Publishing Arm).
Further opportunities were identified in developing Highbury’s export and licensing activities, while Future revealed that its dependence on particular sub-sectors of magazines such as computer games titles would be reduced.
Commenting on the offer, Greg Ingham, chief executive of Future said: “Highbury is a business that we know well and have followed for some time. We consider that it represents an opportunity to acquire a significant asset at a fair price. Whilst the business has faced some challenges in recent times, we are confident that we can integrate the titles and terms, and improve the financial performance and enhance shareholder value.”
Mark Simpson, chief executive of Highbury added: “Future’s offer represents fair value for our shareholders, as well as the opportunity to participate in the significant financial and commercial benefits of combining Highbury’s and Future’s businesses.”
The takeover values Highbury shares at £31.6 million and includes a £64.9 million debt, which is predicted to enhance Future’s earnings in the first year of ownership.
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