(Adds details, analyst comment, share movement)
Sept 18 (Reuters) - UBM Plc, a British communications and events company, confirmed that it was in talks to acquire Advanstar, a privately held U.S. trade show organiser.
Reuters reported on Tuesday that UBM was in advanced talks to acquire Advanstar for around $900 million. [ID:nL1N0RH0ZO
UBM, which also owns PR Newswire, said on Thursday it was involved in discussions which may, or may not, lead to a transaction.
Liberum analysts said that in order to acquire Advanstar at the speculated price, UBM would have to raise around 440 million pounds, or about 30 percent of its market capitalisation.
UBM may not want to raise so much capital and could, perhaps, be close to selling its PR Newswire business, the analysts said in a note. Liberum valued the business at about 500 million pounds.
“A sale of PR Newswire both makes strategic sense. Under this scenario, the transaction would actually be 8-9 percent accretive on our estimated Advanstar contribution,” the analysts said.
UBM, which organises shows in the UK, the United States, China and Turkey among others, declined to comment further when contacted by Reuters.
UBM had 95.6 million pounds in cash and short-term investments as at June 30.
Revenue at PR Newswire, a service used by companies to publish announcements for clients, fell 6.4 percent in the six months ended June 30.
Advanstar is best known for putting on the biannual Magic fashion trade show in Las Vegas, the largest U.S. fashion convention.
UBM received about 27 percent of its event-based revenue from North America in 2013.
UBM’s shares were trading up 2.2 percent at 615 pence at 0845 GMT on the London Stock Exchange. (Reporting by Noor Zainab Hussain in Bangalore; Editing by Gopakumar Warrier)