* Company reckoned growth prospects didn't justify price -
* Private equity groups left in the race - sources
* Enterprise value seen at 1.6-1.8 bln euros - sources
By Nadine Schimroszik and Arno Schuetze
BERLIN/FRANKFURT, Sept 5 German publisher Axel
Springer has dropped out of the race for Deutsche
Telekom's Scout24, leaving buyout groups competing to
buy the online classified advertising business.
A small group of private equity firms will be picked early
next week to submit final bids by a mid-October deadline for a
30 percent stake in Scout24, three people familiar with the
transaction told Reuters on Thursday.
Hellman & Friedman, EQT, KKR, TPG, Silver Lake and
Providence could be among those asked for final bids, after
submitting offers valuing Scout24's debt and equity at 1.6-1.8
billion euros ($2.1-2.4 billion), the sources said.
A 1.5 billion euro price tag would give Scout24 an
enterprise value of 14 to 15 times earnings before interest,
tax, depreciation and amortisation (EBITDA), a source has
previously told Reuters. That is below a ratio of 21 for British
peer Rightmove, according to Thomson Reuters StarMine
"If the bid is high enough, Deutsche Telekom may be tempted
into selling 100 percent of Scout24," a person familiar with the
A spokeswoman for Axel Springer - seen as a likely buyer
with the potential to reap the highest cost savings - confirmed
that the publisher was, for now, no longer interested in
Scout24, without elaborating.
Springer Chief Executive Mathias Doepfner has repeatedly
said that Scout24, a bundle of Internet portals including
European car trading site AutoScout24 and real estate
classifieds site ImmobilienScout24, would be a good fit for the
group but that he is not willing to overpay.
"Paying a top price and not getting control - that's not
something Springer wants," a person familiar with the
Another person familiar with the deal said that Springer
may always come back to the negotiating table.
"With their announcement, they have mainly told their
private equity contenders: we are not the one pushing up the
price," the person said.
The publisher had teamed up with private equity firm General
Atlantic to make an offer for Scout24 as part of its push into
digital media, sources told Reuters last month.
Scout24 could become one of only a few financially
successful investments for Deutsche Telekom, which bought the
business from Swiss private equity firm Beisheim for 180 million
euros in 2004.
Deutsche Telekom and the private equity groups declined to
comment except for Providence, which was not immediately
available for comment.