Forstmann Little to sell talent agency IMG: sources

NEW YORK Wed Feb 20, 2013 9:22pm EST

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NEW YORK (Reuters) - Private equity firm Forstmann Little & Company has decided to put its sports and modeling talent agency IMG up for sale and is in the process of picking an investment bank to lead the effort, three people familiar with the matter said.

The decision to shop IMG, which represents top tennis player Novak Djokovic and supermodel Gisele Bundchen and owns the rights to numerous sports leagues, is being driven by the trustee that runs the estate of Teddy Forstmann - IMG's former chairman and chief executive who died in 2011, the people said.

IMG, which Forstmann bought for $750 million in 2004, could now fetch more than $2 billion in a sale, two of the people said, asking for anonymity because the matter is not public.

Several investment banks including Goldman Sachs (GS.N), JPMorgan Chase & Co (JPM.N), Morgan Stanley (MS.N), The Raine Group, Barclays (BARC.L), Perella Weinberg Partners and LionTree Advisors LLC are competing to win a mandate to run the auction, the people said. A bank is expected to be selected in March, they added.

The sale is expected to draw interest from big entertainment players ranging from Creative Artists Agency and William Morris to French media group Lagardere, according to the people familiar with the matter. Large private equity firms and billionaires are also expected to participate, the people said.

Goldman Sachs, JPMorgan, Barclays and Perella Weinberg declined to comment. Representatives for Morgan Stanley, Raine Group and LionTree Advisors were not immediately available for comment.

Mike Dolan, chairman and chief executive of IMG said recently that a potential sale by owner Forstmann Little is not an issue for IMG to focus on as it concentrates instead on the day-to-day running of the business. An IMG spokesperson did not have further comment.

A representative for Forstmann Little was not immediately available for comment.

Forstmann Little has been holding on to the IMG investment for longer than a typical investment period for private equity, and has for years rebuffed overtures from prospective buyers. Buyout interest increased following Teddy Forstmann's departure in April 2011 as IMG chairman and CEO, and his death later that year.

Notable buyers that had approached Teddy Forstmann included former Yahoo CEO Terry Semel, who was willing to pay $1.5 billion in 2008. Sources told Reuters at the time that Teddy Forstmann wanted at least twice the amount.

Akin Gump Strauss Hauer & Feld litigation partner Mark MacDougall and corporate practice co-chair J. Kenneth Menges, Jr., are managing the wind down of Teddy Forstmann's private equity empire. The firm tried to exit its investment with 24 Hour Fitness last year but the process has since stalled.

(Reporting By Nadia Damouni and Soyoung Kim; additional reporting by Sakthi Prasad; Editing by Bernard Orr and Stephen Coates)

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