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Last Updated: Friday, 28 April 2006, 09:13 GMT 10:13 UK
Yell snaps up Spanish rival TPI
Yell.com website
Yell wants to strengthen its position
Directory publishing group Yell has agreed to buy a majority stake in Spanish phone directory firm Telefonica Publicidad e Informacion (TPI).

Yell - which operates the Yellow Pages in the UK - also launched a bid for the whole of the firm, valuing it at 3.3bn euros (2.3bn; $4.1bn).

TPI, which is owned by phone company Telefonica, publishes 182 directories in Spain and has an online business.

Yell said it wants a European arm to compliment its UK and US operations.

"TPI is a high quality directory business in Spain, one of Europe's largest and most attractive economies," said John Condron, Yell's chief executive.

"It is a business we have looked at for a long time and we are confident it will add significant value to Yell."

Cost savings

Yell said it had agreed to buy Telefonica's 59.9% stake in TPI and offered to buy the remaining shares in the company as a result.

Yell said it has the backing of TPI's management.

The cash offer values each TPI share at 8.50 euros. Under the deal Yell will also take on TPI's 220m euros of estimated debt.

The deal comes as European directory companies are looking to consolidate in order to cut costs and boost profits.

"This is quite a good offer and we don't see a third party emerging to scupper the deal," said CSFB analyst Giasone Salati, though he added that the deal was "quite expensive".

Yell's announcement sent its shares 3.5% lower to 511 pence in London. Telefonica and TPI also fell.

Yell's revenues in the nine months to 31 December rose 23.7% to 1.1bn ($1.95bn), while pre-tax profits rose to 220m from 173m.

It expects the purchase of TPI to save as much as 22m euros a year by the end of 2009.

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