People familiar with the sale process say price tag for the media and information business was set at around $10 million
DUBAI: Some potential buyers of MEED, the UAEbased media and information business, are balking at the price tag put on it by its owners.
One potential buyer sounded out over a potential acquisition said that the valuation was out of line with his estimate of its worth.
Sabah Al-Binali, the Abu Dhabi-based former chairman of the Zawya information group, told Arab News: “I was informally approached earlier this year by an unconnected intermediary but the price did not fit with my target range and that was that.”
He did not disclose the price he was quoted, but people familiar with the sale process put it at around $10 million.
One person who did not want to be named said: “The owners are asking for a price for MEED higher than anybody is willing to pay. Things have got bad in publishing and media and you cannot get the profit multiples of the past.”
Al-Binali is a seasoned media entrepreneur in the Middle East. He was also chief investment officer at Saffar Capital, the private equity group that sold Zawya to Thomson Reuters for a reported $40 million in 2012.
He is currently working on plans for a new media start-up in the region, and was initially interested in Meed as part of this project.
MEED is the last title remaining unsold after owners Ascential announced it was selling its stable of “heritage” titles. Twelve, including Nursing Times and Construction News, were recently sold for £23.5 million ($29.9 million).
Ascential — formerly known as Emap, the British publishing group — was listed on the London Stock Exchange last year when owners Guardian Media Group, publisher of the UK daily newspaper, and private equity group Apax sold down some of their shareholdings.
The apparent lack of interest in MEED at the asking price is a sign of falling values in media groups in the current market. There was talk in 2013 that Pearson, the conglomerate that sold the Financial Times for $1.3 billion 2015, was interested in buying MEED for £35 million.
MEED is best known for the business magazine sometimes called “the Economist of the Middle East,” first published 60 years ago, but is now a monthly publication backed up by a daily rolling news website. It also has a lucrative project-listing business unit, specializing in contracts data in construction and infrastructure development, as well as an events and conferences business and an intelligence consultancy unit.
“There is a counter-argument that it is an information business and so should get a valuation more like Google, but that case has not been proved,” the person familiar with the situation said.
No explanation has been given as to why MEED was left out of the earlier Ascential deals, but there was speculation the purchasers — two UK-based publishers — did not have expertise or interest in the Middle East.
MEED’s prospects have also been clouded by the slowdown in regional economies as a result of the oil-price decline since 2014. The source said: “If you are buying MEED, you are buying into the Middle East, so how much you will pay for it depends on your view of the region.”
Staff working at MEED’s headquarters in Dubai Media City are thought to be concerned that no buyer has yet been found. One, speaking anonymously, said: “If they cannot find a trade buyer their options are to keep it, which does not look likely, or to close it.”
It is not known if any other potential buyers are looking at MEED. There has been speculation among senior MEED staff that a management buyout might be attempted, but so far there has been no sign these plans have advanced any further. Raising funds for a media buy-out in the current market could be problematic.
Individual subscription rates for MEED’s full premium service amount to $2,500 per year, with a business package allowing multiple users for $7,500. It is believed to be operating profitably.
Senior executives of MEED and Ascential in Dubai and London did not immediately respond to requests for comment when approached by Arab News.