Alma Media offers to buy out Talentum

Price offered by Alma seen as insufficient

Kai Telanne

Kai Mäkelä

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The media concern Alma Media made an offer on Monday to buy out the media company Talentum. However, the price that was offered did not spark much interest among other large owners of Talentum.
      Alma would need more than 90 per cent of Talentum’s shares before it would be able to expropriate the remaining shares and implement a merger.
      The opening move came on Monday, when Alma Media bought 375,000 shares of Talentum stock from the pension company Varma.
     
The deal with Varma raised Alma’s ownershp of Talentum to more than 30 per cent. Under securities legislation, the company was compelled to make an offer for the remaining shares as well.
      “We have bought one consignment of shares now, and no further negotiations have been held”, said Alma Media CEO Kai Telanne.
      He would not say how likely he feels that the offer, and the merger would be accepted by the Talentum’s other shareholders.
      The financial journal Kauppalehti, a publication owned by Alma Media, has been the largest owner of Talentum stock since 2001. In late June its holding was 29.8 per cent.
      “For Alma Media, Talentum would mean new business activities in professional journals, where we do not operate now”, Telanne said.
     
Talentum’s current shareholders include many labour unions, who buy subscriptions for their members. Telanne believes that giving up their shareholdings would not affect the unions’ subscriptions.
     
The price that was offered is EUR 1.85 per share, which is 6.3 per cent higher than Talentum’s closing share price on the Helsinki Stock Exchange on Friday. The total value of the offer is EUR 55.6 million.
      Talentum shares have not been traded much, and Telanne touted a good opportunity for other owners to turn their holdings into cash.
      Analysts felt that the price that was offered was low. Talentum’s share price sprang up immediately after the news came out. The closing price was EUR 1.88 a share, a rise of eight per cent.
      Alma’s share price rose three per cent on Monday.
     
Talentum’s second-largest owner Kai Mäkelä said that the price that was offered by Alma Media was too low, and he does not plan to sell for now at least. Mäkelä owns ten per cent of Talentum through his investment company Herttaässä. Mäkelä also owns 11.3 per cent of Alma Media.
      Mäkelä has called for a merger of Alma Media and Talentum for years, but all of his proposals have been rejected.
      The pension insurance company Ilmarinen, which owns 7.8 per cent of Talentum, is also not interested in selling its holding at the price proposed by Alma Media.
     
Alma Media’s Kai Telanne says that the offer will not be increased.
      “Even at this price we are taking a significant risk. Talentum is operating at a loss, and there is no vision of any improvement in the situation.”
      Telanne does not believe that Mäkelä’s holding will prove an obstacle to Alma’s goals. “We have had good contact with Mäkelä. We have both spoken of consolidation, and now there is a possibility for it”, Telanne says.
     
At the Sanoma Corporation, which operates Helsingin Sanomat, CEO Hannu Syrjänen notes that the merger of Alma and Talentum would establish a significant concentration of the financial media.
      “The Office of Free Competition should be vigilant”, Syrjänen says.
      He also said that Sanoma is not making a competitive offer.
      “A large portion of Talentum is in products and services, which would not fit into our portfolio.”


Links:
  Alma Media press release: Alma Media Corporation makes a mandatory tender offer for all shares in Talentum Oyj

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