Emap shares soar as CEO resignation sparks bid talk

The Daily Telegraph reports that Emap shares soar as CEO resignation sparks bid talk.

Shares in Emap, the publisher of FHM, soared by 7pc this morning after the unexpected resignation of chief executive Tom Moloney sparked speculation that the company could soon become a takeover target.

The announcement that Mr Moloney was stepping down "by mutual agreement" comes just days before Emap is due to report its full-year results and ongoing strategic review to the market next Tuesday.

Alan Cathcart, previously non-executive chairman, has been appointed interim executive chairman until a permanent replacement can been found, which could take months.

Emap's management has been under pressure for some time from investors who are unhappy at the lack of a successful growth strategy and the disappointing share price.

The company issued a profits warning in February as it said difficult consumer markets would leave profits at the bottom end of City expectations this year.

But sources close to Emap said that Mr Moloney's departure was related to execution of the company's strategy, rather than a problem with the strategy itself.

Analysts believe that Emap, which owns a variety of business-to-business publications as well as consumer brands like Heat magazine and the radio stations Kiss and Magic, would be an attractive break-up target for private equity investors because it is clearly divided into three different businesses with strong decent levels of cash.

Emap shares rose by as much as 65p, to £9.03, in early trading.

But Emap insisted that it was persevering with its strategy of growing the business by focusing on digital media, rather than looking to break the company up.

Mr Moloney joined Emap in 1981 and was chief executive of the UK consumer magazines arm and chief operating officer before becoming head of Emap's American business. He became head of the whole company in January 2003.