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Monday, August 21, 2006

Wilmington left at the Altar as Euromoney buys Metal Bulletin

The demise of the deal between Wilmington and Metal Bulletin is bad news for the former. The proposed merger would have delivered little benefit save for scale, but the mid marklet companies in business media, Centaur, Incisive, ITE, Wilmington et al need scale otherwise they will get crushed by the big players and out manouvered by the small.

The killer counter bid by Euromoney was judged to be just sufficient to make it impossible for the merger team to respond. Any increase in the relative valuation of Metal Bulletin in the deal would have all but wiped out the value of any cost savings that would have arisen.

This aborted deal leaves Wilmnington adrift and looking for a deal. Senior management sources in Wilmington told me before the Euromoney announcement that they expected someone would counterbid. If that's true one wonders why they didn't have a strategy for dealing with just that eventuality.

The problem now for Wilmington is that there are not too many firms with whom to do a credible deal. Expect Wilmington shares to underperform.


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