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UPDATE 2-Finnish publisher Alma makes $118 mln bid for rival

Published 08/10/2009, 05:39 AM
NDASE
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* Raises Talentum stake to 30.7 percent

* Offers 1.85 euros for all remaining Talentum shares

* Shares in Alma and Talentum jump

(Adds share price reaction, analyst's comment)

By Eva Lamppu and Tarmo Virki

HELSINKI, Aug 10 (Reuters) - Finnish publisher Alma Media Oyj on Monday made a long-awaited cash offer for all shares in Talentum, valuing its smaller rival at 81.9 million euros ($117.6 million).

The struggling Finnish media sector, led by Sanoma, is now starting to consolidate to offset falling advertising revenues and customer spending as the recession bites.

Alma Media, the top shareholder in Talentum, said it bought 375,000 more shares on Monday, raising its stake above 30 percent and triggering the offer. It has often speculated publicly about making a bid for the firm.

Alma said it would offer 1.85 euros for each Talentum share it does not own, a 13.6-percent premium over the stock's three-month volume-weighted average price. It did not set an ownership threshold in the offer, which opens around Aug 19.

Shares in Talentum, publisher of Finland's popular business magazine Talouselama, jumped 10.9 percent on the deal to 1.93 euros by 0914 GMT, while shares in Alma Media rose 4.9 percent to 5.59 euros.

"The consolidation would complement the companies' product range and give more resources to business development and internationalisation," Alma said in a statement.

In addition, the consolidation would stabilise Talentum's more cyclical business model and would create prerequisites for a stable distribution of profits," it said.

Talentum focuses on trade media, supporting Alma Media's more consumer-focused offering which includes the country's largest business daily Kauppalehti. Both firms have struggled in the recession.

Alma last month reported January-June operating profit down 31 percent year-on-year to 18.5 million euros, with newspaper advertising sales some 20 percent lower, while Talentum slumped to a six-month operating loss from a year-ago profit.

Tuomas Itkonen, Chief Financial Officer of Alma Media, told Reuters the firm had not spoken to Talentum's key shareholders before making the offer, only informed its chairman.

Investor Kai Makela and insurer Ilmarinen, who at end-June held 10 percent and 7.8 percent respectively of shares and votes in Talentum, told Finnish news agency Startel they were not interested to sell for the price offered by Alma.

Bengt Dahlstrom, analyst at eQ Bank, said the market had speculated for a long time on how long Alma Media would keep its Talentum stake below 30 percent.

"The timing is good. The valuation of the Talentum share has not been very high -- the media industry has been under a lot of pressure, which has affected the share price," Dahlstrom said.

Alma Media said in a separate statement it has signed a two-year credit facility for 50 million euros with Nordea Bank Finland to strengthen its financing and boost its liquidity.

Separately, shareholders of publisher Ilkka are set to decide later on Monday on a share issue to finance a previously-announced deal that would raise its stake in Alma Media to 20.4 percent. (Editing by David Cowell)

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