Springer could be forced to raise its offer

Battle in sight in the area of real estate ads on the Internet. Axel Springer announced taking a 12.4 interest in site SeLoger, leader on the French market. This share is held by the founders, Amal Amar and Denys torch. The German group, on the other hand, launched Friday, while the course was suspended, offer redemption on the balance of the titles of SeLoger, 34 euros per share, valuing the company 566 million euros, almost 8 times its turnover of 2009 and 15 times Ebitda (gross operating surplus). This price represents a premium of 13.3 in the action, which closed Thursday late sitting at 30 euros, but that exceeded end of 2007 the 46 euros end of 2007.

Springer feels satisfied to be "a majority shareholder of SeLoger value." For Mathias Döpfner, CEO of the group, "classified ads are the core business of Axel Springer since his." We observe a rapid migration of this market of advertising, the paper Web and Axel Springer is already a major actor of the Internet in several European countries. Our investment in Seloger thus fits perfectly into our strategy.

But, SeLoger shareholder since 2002, group Arnault (the holding company of Bernard Arnault, owner of "Echos" via LVMH), immediately found that the offer "sous-valorise clearly the company in view of its potential for growth, its profitability and its undisputed position as market leader". Group is not the intention, in these circumstances, to surrender its 9 stake.

Emmanuel Parot, analyst at Gilbert Dupont, expects a counteroffer. "The offer is not very attractive, agreed." Upgrading seems low compared to the objective of course that we set to 36 euros. "According to him, three types of companies may make a counter offer in the next few days: a media group, a foreign competitor or an investment fund. Several Anglo-Saxon funds, among which the American Lone Pine Capital and the British Caledonia Investments, Fidelity International and Threadneedle, are already present in the capital. None of them has wished to comment on the offer of Springer. Lone Pine Capital is is however recently lightened by crossing the threshold of 10 down. Gilbert Dupont, the hypothesis of a counteroffer by a Fund remains the most likely. The Supervisory Board of SeLoger must meet in the coming days. The offer of Springer would have taken short business leaders, who refuse for the moment to comment on the operation. The task of the German group looks difficult, the majority of the capital being diluted between six shareholders, including group Arnault, and 18 of the capital is floating. Springer could be forced to raise its offer.

Growth potential

SeLoger acquired a dominant position on the French market. Created in 1992 and first positioned on the Minitel, the company was one of the pioneers on the Internet by launching its website in 1996. Today, it offers more than 1.1 million bid, attracts each month more than 3 million unique visitors and continued growth in its turnover during the crisis. The half-yearly results announced Thursday evening also confirm the recovery with a growth of 11.2 of net consolidated sales of EUR 39.4 million, and a margin of 52 Ebitda. A first dividend was paid to the shareholders in the first half.

The company has also maintained its objectives for the year 2010, with a turnover between 81 and 84 million euros and an Ebitda situated between 42 and 44 million euros. According to observers, society still have a significant margin of progression, the penetration rate of approximately 60 real estate agencies, when Rightmove, the United Kingdom, worked with 90 of agencies. The offer in any case awakened rumours of acquisitions in the sector. Friday, the Hi-Media Authority won 2.77 to the stock exchange of Paris and the dating site Meetic 4,61, on rumours of redemption (see page 26).