Auto Trader attracts private equity interest

Publishing company Guardian Media Group said today it was in talks with a trio of private equity bidders looking to buy a minority stake in its Trader Media Group business, which publishes Auto Trader.

GMG had been planning to float the business but has received approaches from private equity firms Apax, Blackstone and Candover, it emerged.

A GMG spokesman said floating the business was still the “preferred option” but it had asked the suitors to come up with more detailed proposals.

GMG, which also owns national newspapers The Guardian and The Observer, regional newspapers, and radio stations, intends to retain a majority shareholding in Trader.

He said: “We have decided – given the level of interest that has been expressed – to invite a small number of parties to clarify the precise nature, structure and value of their proposals.”

Trader Media Group, based in Thatcham, Berkshire, publishes more than 70 titles including Auto Trader, Bike Trader and Truck Trader.

The business, which has 3,800 staff, lifted operating profits 2.8% to £119.5 million on sales of £303.3 million in the year to 2 April 2006. It is the biggest contributor to profits at GMG, which made underlying pre-tax profits of £98.2 million on sales of £700.3 million over the period.

Despite a “challenging year” the company launched new titles last year including Fusion, aimed targeted at the half a million-plus Eastern Europeans living in London, in a bid to restore profit growth.

Auto Trader has a weekly circulation of 278,000 and its website gets nearly seven million visits a month.

The magazine was founded by John Madejski, chairman of Premiership football club Reading, in 1977. GMG then approached Mr Madejski’s Hurst Publishing company over running complementary car listings titles in 1983.

Venture capitalists BC Partners acquired part of Hurst in 1998 and approached GMG with a merger proposals to create Trader Media Group. GMG bought out BC Partners in 2003 to take 100% control of the business.