Specialist publishing and events firm Informa (INF) is getting the thumbs down from the market on its £9bn combination with rival UBM (UBM).

Confirming a proposed combination, UBM is up 13.4% to 891.5p while Informa falls 8.4% to 684.6p.

Investec analyst Steve Liechti spells out what Informa is paying to secure the deal.

'At 747p, this implies a price of 972p (+30% premium vs undisturbed)... this implies an enterprise value of £4.5bn for UBM and a very high FY18E pre-synergy EV/EBITDA of 14.6x or 12.9x on our assumed £40m savings (1.5% of total combined sales).'

In Liechti's view this is a 'full price'. 'We see a good potential deal for UBM given a nice implied exit premium vs growth questions,' he adds.

'We see strategic merits for Informa but only modest earnings per share accretion depending on synergies, and this looks a very full price ex synergies with execution risks for mid-term like-for-like and margin.'

Shore Capital analyst Roddy Davidson is more positive. He says: 'We are long-standing bulls of the events space reflecting our positive view on its long-term growth profile, the ability to geo-clone leading shows and its attractive cash flow and revenue visibility characteristics.

'On a first pass basis we believe a combination of Informa and UBM would be well placed to capitalise on these dynamics and could be positive for both sets of shareholders if a deal is struck at an appropriate price and the subsequent integration process thoroughly executed.

'More broadly, yesterday's news could also prompt interest in Tarsus (TRS) which we regard as a good quality, well managed business with an attractive portfolio of events.'

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