BBC’s commercial arm thought to be exploring outside investors or even sale of guidebook publisher valued at £85m
BBC Worldwide is understood to be exploring strategic options for Lonely Planet, including seeking an outside investor or even a potential sale of the guidebook publisher, which it values at about £85m.
The BBC’s commercial arm, which took full control of Lonely Planet in February last year, is understood to be most keen on the option of pursuing the sale of a stake in the business. One source said they believed that there has been interest from investors in the US.
TripAdvisor and Expedia investor Barry Diller would make for a good fit for the BBC, but it is not known if he is involved in talks.
It is thought that Diller’s vehicle IAC, which also owns search engine Ask Jeeves, were interested in Lonely Planet when co-founders Tony and Maureen Wheeler decided to sell an initial 75% stake to BBC Worldwide in 2007 – a deal that prompted widespread criticism from the corporation’s commercial rivals.
A second source said they believed that a deal is close to being done with an unknown third party.
BBC Worldwide declined to comment. “Lonely Planet is a fantastic brand which has seen tremendous success over recent years and we’re not going to comment on speculation about its future,” said a BBC Worldwide spokesman.
It is thought that BBC Trust chairman Lord Patten is keen on the idea of reining in BBC Worldwide’s expansionist ambitions. Patten is understood not to have been happy the scope of non-TV investments made by outgoing BBC Worldwide chief executive John Smith.
The BBC Trust would have to approve any deal involving the sale, or part sale, of Lonely Planet – as it did the original acquisition.
Financially Lonely Planet has been a difficult investment for BBC Worldwide, which paid a total of £130.2m for the business in two stages, 2007 and 2011.
Earlier this year the BBC revealed it had written down the value of the business by £50m over five years. In July, BBC Worldwide said it valued the business at £85m.
Last year BBC Worldwide was forced to take a £16.1m charge thanks to the sky-high strength of the Australian dollar, the home of Lonely Planet which carries a significant cost base, and had to make rounds of staff cuts as a result.
Smith has previously said that Lonely Planet has a “solid underlying performance” while refusing to comment on whether after five years of ownership it is profitable.
“It is the value of the brand that is the key thing,” he said earlier this year.
BBC Worldwide kept full control of Lonely Planet when it struck a £121m deal to offload its magazine division to private equity firm Exponent last year.
The BBC has been dogged by criticism ever since it invested an initial £88m to take a 75% stake in Lonely Planet in 2007.
Rivals including Time Out founder Tony Elliott were angered at the expansion into areas not directly connected with BBC programmes.
A third source said the integration of Lonely Planet with BBC Worldwide programming and content has been difficult – even hampered – by the criticism of the acquisition, which has left the business somewhat isolated.
The corporation took full control of Lonely Planet, founded in a Melbourne kitchen in 1972 before growing into arguably the world’s best-known travel publisher, when founders Tony and Maureen Wheeler exercised an option to sell their remaining 25% stake to BBC Worldwide for £42.1m last year.
When rumours emerged in 2009 that Lonely Planet was the “top of the list” of assets reviewed for potential sale by the BBC Trust, the corporation issued a denial saying it was “not up for sale full stop”.
In the same year former BBC Trust chairman Sir Michael Lyons ordered BBC Worldwide to come up with a three-year action plan, which included the selloff of some assets, and to concentrate on “things consistent with the BBC’s public purposes”.
BBC Worldwide has done a lot to grow the business, expanding Lonely Planet’s digital operations, presence in magazines and improving its position in the US market.
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