Private equity group Hg draws fund interest for Argus Media stake -sources

By Amy-Jo Crowley and Emma-Victoria Farr

LONDON (Reuters) – Hg has drawn interest from potential investors, including Mubadala and CDPQ, for its stake in Argus Media, four people familiar with the matter said, in a deal that could value the oil pricing data business at more than four billion pounds ($4.87 billion).

Private equity fund Hg is gauging interest from long-term funds for its 25% holding in the media company, which assesses global oil prices and provides industry news, the people said, speaking on condition of anonymity.

Singapore-based GIC and Canada’s CPP Investments have also shown interest in a deal, two of the people said, as well as Intermediate Capital Group, one of them added.

Hg is considering other options including selling part of its stake to joint shareholder General Atlantic, or pursuing an initial public offer (IPO) of Argus, three of the people said.

It wants to return capital to investors and a deal could value the business at north of four billion pounds, two of the people said.

Deliberations remain at an early stage ahead of a possible, more formal sale process, which could start as soon as this year, two of the people said.

The sources cautioned that no deal is certain and the company’s shareholders’ differing rights over the firm could complicate a potential transaction.

Spokespeople for Hg, General Atlantic, Mubadala, CDPQ, GIC, ICG and CPPIB declined to comment.

Hg bought half of General Atlantic’s 50% stake in Argus in 2019, valuing the London-based company at more than two billion pounds at the time.

CEO Adrian Binks and management own the rest of business, with Binks having special rights, including over how much debt can be put on the business, potentially diluting the deal’s appeal to new investors, two of the people said.

A spokesperson for Argus and Binks declined to comment.

One challenge facing the business, which focuses on commodities and oil, is maintaining demand with the shift to green energy, two people said.

Argus has had a boost from the oil crisis triggered by the Ukraine war, they said. One person close to the company said its offering has diversified beyond oil into other areas such as those related to the energy transition.

Other recent deals in the sector include S&P Global’s sale of pricing-reporting agency Opis to News Corp in 2021 for $1.2 billion. Last year, private equity firm Astorg took control of commodity price and news specialist Fastmarkets, after taking its former parent company Euromoney private.

Argus reported an operating profit before depreciation, amortisation and exceptional items of 107 million pounds in the year to June 2022, up from 93 million pounds recorded in the same period the year before, according to company filings.

Mergermarket reported that Hg was considering options for its stake in Argus in September.

($1 = 0.8217 pounds)

(Reporting by Amy-Jo Crowley and Emma-Victoria Farr. Editing by Anousha Sakoui, Kirsten Donovan)