- Options said to include sale or IPO of the education unit
- Company may make a decision on its 75% stake by year end
The publisher of Spain’s El Pais newspaper is weighing options for its 75 percent stake in education company Santillana that may lead to a sale as part of efforts to reduce debt, people familiar with the matter said.
Any transaction may value the whole of Santillana at up to 2 billion euros ($2.3 billion), the people said, asking not to be identified because the deliberations are private. Other options include a partial sale or an initial public offering of the business, the people said.
Discussions are at an early stage and Promotora de Informaciones SA, also known as Prisa, may make a decision by year end, the people said. A spokeswoman for Prisa said that there’s no sale process for Santillana and that the company isn’t under pressure to sell assets immediately.
Private equity firm Victoria Capital Partners, which owns the other 25 percent of Santillana, is also exploring options including a sale of its stake, the people said. Prisa sold the minority stake in Santillana for about $370 million in 2010 to DLJ South American Partners, the predecessor of Victoria Capital. A spokesman for Victoria declined to comment.
Prisa shares rose 3.1 percent to 5.67 euros at 2:05 p.m. in Madrid Wednesday, making it the third best performer in the Madrid Stock Exchange General Index. The stock has gained 8.6 percent this year.
Prisa -- whose investors include hedge fund Amber Capital, Spain’s biggest phone company Telefonica SA and Banco Santander SA -- is working to reduce its 1.56 billion euros of net bank debt. The media company reached an agreement with shareholders to restructure about 3 billion euros in debt in 2013 as it grapples with a decline in newspaper circulation and traditional advertising revenue. Santillana publishes textbooks and sells digital and other learning materials for schools in 22 countries.
Telefonica agreed to buy Prisa’s 56 percent stake in pay-TV business Distribuidora de Television Digital SA for 725 million euros in 2014. The company has also sold a 17 percent holding in Mediaset Espana Comunicacion SA since 2014, using the proceeds to cancel debt, according to its July financial report.