UPDATE 3-Emap aims to sell B2B arm in one go, shares rise

(Rewrites, adds analyst comments following conference call)

By Gavin Haycock

LONDON, Sept 27 (Reuters) - Media group Emap EMA.L, which is considering a sale or break up, told analysts on Thursday it expects to sell its business-to-business (B2B) assets in one go and its shares rose as investors welcomed the decision.

In its trading update, issued before the UK share market opened, Emap said it was encouraged by the progress of the review and it was still looking at all options including a sale or demerger of some or all of the overall group.

Shares in the company were little changed in early trading but after a subsequent call with analysts they rose to finish 3.5 percent higher at 881 pence.

The gains made Emap one of the best performing media stocks in Europe and volume was 1.6 times the average daily amount over the past month.

"One of the few nuggets to come out of the conference call was that B2B will be sold as a whole, rather than in small parcels," said Panmure Gordon analyst Alex DeGroote. "This is supportive of a higher divisional valuation ...," he added.

Panmure Gordon, which has a sum-of-the-parts valuation on Emap of 950-1,010 pence, said it expects the break up of the entire business to proceed despite tougher credit markets.

A Reuters poll of seven analysts has break-up valuations on Emap ranging from 910 pence to 1,100 pence.

Sources familiar with the situation say Apax, Cinven and CVC are among private equity firms interested in Emap, along with trade rivals United Business Media (UBM.L) and Reed Elsevier (ELSN.AS) (REL.L).

Emap said recent trading has been encouraging and it is on track to meet expectations for the full year.

The magazines, trade shows and radio group said continuing first-half group revenue, adjusted for disposals and closures, is expected to be down 1 percent on an underlying basis. This represents an improvement on the 2 percent first-quarter fall.

B2B PERFORMS WELL

The company said its business-to-business division is expected to post 5 percent underlying revenue growth although B2B magazines are trading broadly flat.

ABM AMRO described the B2B unit as the "star performer" in the group.