Yell Pursuing TPI

A Reuters report today reveals that Britain’s Yell Group has taken formal steps toward submitting a bid for the 60 percent stake in the Spanish publisher Telefonica Publicidad e Informacion currently owned by Telefonica. Yell has retained Goldman Sachs to advise it on the potential bid. You can read the Reuters item here.

If this takes place, it would be a departure for Yell, which has focused all of its acquisition energy and capital on enlarging its U.S. directory business, Yellow Book. However, Yell has in the past indicated a willingness to look at deals on the European continent as well.

TPI is also expected to attract bids from private equities, which have not lost their fervor for directory deals. Less clear is the degree to which France’s PagesJaunes is interested in the deal.

TPI, which reported 2005 group revenues of 654 million euros, is the leading publisher in Spain with directory operations in Brazil, Argentina, Chile and Puru, and a competitive DA operation in Italy.

Yell is the market leader in the U.K. and the largest independent publisher in the United States. It also contends with a rate cap in the U.K. that does not appear to be going away any time soon. This may help explain its interest in finding new acquisition targets.