LadBible confirms bid for Unilad and reveals it is owed £5m in debt
The Unilad Bible - a mock up of the two title's logos
Unilad was put into administration by creditors Alex Partridge, its founder, and HMRC (which are owed £5m and £1.5m respectively) on Thursday.
Since then John Quinlan, managing director of Unilad, has circulated an email to more than 200 staff criticising the administrators and pointing to what he describes as LadBible's involvement in the company's current predicament.
He wrote: "In the court papers the applicant stated that there was already an interested third party. While unnamed we believe this to be LadBible. This is particularly concerning because during negotiations with Alex in attempts to keep the business solvent our investor group were told by Alex’s solicitor that he had reached an exclusive arrangement with his debt with a third party. Whilst we have no proof of this yet we believe this to also be LadBible who less than a week before had made an offer to acquire Unilad for considerably less than it’s worth."
A spokesperson for LadBible confirmed that it had previously bid for the company, and has indeed bought up ousted Unilad founder Partridge's £5m in debt. Partridge has been long engaged in a legal dispute with current owners Liam Harrington and Sam Bentley, suing them for his share of the business. LadBible now owns that debt, making it the largest creditor of Unilad.
They said: “After the administrator was appointed we acquired Alex Partridge’s debt of £5m. The company has a total debt of circa £10m. An administrator was appointed by Alex Partridge yesterday. We want to get the best recovery we can for the debt that we own.”
On whether or not it will buy or liquidate the assets, the spokesman said: "We don’t know. We have further due diligence to do, we don’t know enough yet to form a view and ultimately, it’s up to the administrator. To decide what happens next.”
Finally, he added that the first offer had been ignored: “We can confirm we made an offer a few weeks ago but were completely ignored by the management team.”
LadBible and Unilad have inarguable similarities. They were both ‘lad’ titles formed on Facebook; they boast similar white text on black logos; and they built social empires on the back of similar strains of viral content. On social media, some commentators have expressed as much.
However, LadBible outlined that it has adopted a different strategy to its rival Unilad, and diversified where Unilad hasn't.
A LadBible spokesperson said: “LadBible has successfully developed a social good strategy that tackles the issues that really matter to youth audiences, from mental health to politics and the environment.
“It has been a defining 12 months for LadBible Group - picking up eight prestigious Cannes Lions including two Grand Prix for our Trash Isles campaign. This campaign was described by the United Nations as ‘creative and innovative’ and had the support of Dame Judi Dench, Sir David Attenborough and Al Gore.
“We also focussed on diversifying our portfolio, launching one of the fastest growing Snapchat Discover channels, becoming a launch partner for Instagram’s IGTV and ranked among Britain’s fastest growing private tech companies' according to The Sunday Times Fast Track.”
Meanwhile, Unilad's MD Quinlan said his staff have been locked out of systems by administrators. In an email distributed throughout the company, he added that rival LadBible had tried to acquire the brand.
He told The Drum that his team valued the company at between £40m-£50m before it entered administration and stressed that it had just reached a new level of profitability before its legacy debt caught up with it. Quinlan did warn that the value of the company was decreasing as staff couldn't submit new content on the website. He placed the blame on the administrator, Leonard Curtis which is now in full control of Unilad.
Quinlan, said: “We would note that despite reassurances yesterday that the company would continue to run so as to preserve value for everyone the editorial staff have been locked out of Wordpress and are unable to write articles at the moment. The social media staff are also locked out of the Sniffr licensing platform which is negatively impacting the ability of the social staff to preserve the value of the Facebook pages. These actions are not consistent with keeping the business running operationally and maintaining value in the business."
First, there was a £10m joint bid from Linton Capital, whose managing partner is Unilad’s interim chief executive David Sefton, and Rocket Sports Media, a digital publisher of sport and entertainment websites. There was also a rival loan offered by global investment vehicle Alpha Blue Ocean - a £10m loan with a 12-month maturity and a 12% interest rate. These may lose out to the LadBible stake on the company.
The Drum has knowledge of several more potential bidders eyeing up the company.
Quinlan accused creditor and founder Partridge of “mothballing” the business by pausing its work. He also criticised the bidding process that the administrators Leonard Curtis has adopted. He said a requirement for bidders to submit a non-refundable deposit in order to receive exclusivity to bid for the company was in place. And that potential bidders had until a deadline of Monday 8 October to act. He claimed legal representation has been in touch with the administrators.
The Drum has contacted Leonard Curtis to substantiate this the claim.
Quinlan continued: “This is highly unusual and will no doubt limit the number of bidders to are able to bid for the business which will stop the highest value for the company being achieved.” He said the administrators have been contacted by company lawyers expressing regards about this process.
The main Unilad account boasts 39 million Facebook followers, 2.5 million on Instagram and 192,000 on Twitter. Combined it claims to have 60 million fans and says its viral videos reach one billion eyes a week.
This substantial social media presence that may prove desirable to incoming bidders.
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