Ratings Agency Fitch Bids For Deals Newswire

Ratings Agency Fitch Bids For Deals Newswire

The parent of Fitch, one of the world's biggest credit ratings agencies, has emerged as a surprise bidder for a provider of business intelligence being sold by the owner of the Financial Times.

Sky News has learnt that Fitch Group has lodged an interest in acquiring Mergermarket, which charges subscribers fees for supplying information about takeover deals and companies to the City and Wall Street.

The business is being sold by Pearson, the FTSE-100 media and education group which owns the FT and a stake in Penguin Random House, the global book publisher.

Fitch is understood to be competing to buy Mergermarket against BC Partners and Warburg Pincus, two private equity firms, the latter of which has joined forces with Caspar Hobbs, the site's founder.

Advance Publications, the owner of Conde Nast, the publishing house behind magazines such as GQ, Vanity Fair and Vogue, is also understood to have made an offer for Mergermarket although it was unclear on Wednesday whether it remained in the auction.

Two other buyout groups, Advent International and Providence Equity Partners, are said to have dropped out of the process in recent days.

Final bids for Mergermarket are due next Wednesday, insiders said, with Pearson deemed unlikely to sell Mergermarket for less than £300m, three times the price it paid to buy the business information service in 2006.

Mergermarket was founded in 2000 to offer financial news and information to clients such as banks and hedge funds. It was acquired by Pearson in 2006 although John Fallon, its chief executive, has judged the division to be non-core.

That decision has triggered a revival of speculation that the FT itself is likely to be sold following the leadership transition at Pearson, although Mr Fallon has said that drawing such an inference from the Mergermarket disposal would be misleading.

Fitch's presence in the auction is intriguing, since acquiring Mergermarket would represent a strategic departure for the ratings agency. Standard & Poor's, Fitch's competitor, does offer a similar intelligence service about business and finance.

Pearson does not break down the financial performance of the constituents of its FT Group unit - the other component of which is its 50% stake in The Economist newspaper - although Mergermarket is said to contribute significantly to the division's profit.

Fitch is jointly-owned by Hearst, the American publishing group, and Fimalac, a French financial services holding company.

Pearson and the bidders for Mergermarket declined to comment.