Hang on to the Eastern Wind

"Eastern Directories Pte Ltd has signed a non-binding Letter of Intent with SPH to dispose off selected media assets, namely, the IT Show, Comex, Food and Beverage Fair and the World Food Fair.

This transaction is expected to have a material financial impact on the Company."

In a previous post (The Sun rises from the East), MYOB has conservatively valued the entire business at $20 million, based on a generous ROI of 10%. SPH paid $7.1 million to take over Hardwarezone, an regional online media portal with a magazine business.

For FY06/07, Eastern's revenue from the sale of exhibition space was $8.05 million. A rough estimate would value the deal with SPH at $8-10 million.

Management has said that the media business was a cash cow that would provide the company with a solid base to work through good times, and bad. Management would have to justify their move. Perhaps the MICE space is getting too competitive.

We'll have to wait for more details, and more importantly, the price that SPH is paying.