A GROUP of shareholders in Emap has devised an ambitious scheme to oust chairman Alun Cathcart if his £2 billion break-up plan fails to deliver.

They have lined up Sir David Arculus, a 25-year company veteran who was managing director until 1997, to lead a revival. Arculus, a nonexecutive director of the mobile-phone group O2, would be incentivised with a package that would pay out if Emap shares reached £12 in three years. That figure is £2 above the value most analysts believe could be achieved by selling the group’s three divisions – radio, consumer magazines and business titles and exhibitions – and more than £3 above its current share price.

The plan, which claimed the support of investors speaking for 25% of Emap, was first presented in July to Cathcart and senior independent director David Rough.

After easing out chief executive Tom Moloney in May, Cathcart had promised to mount his own turnround.

But just days after the meeting he performed a volte face, announcing Emap had received “various unsolicited proposals” and would appoint Citigroup and Lazard to listen to offers.

Second-round bids are due in mid-November, when Emap is scheduled to update the City on its progress.

The shareholders involved in the scheme to oust Cathcart wished to remain anonymous, but one said: “It’s a great shame to be breaking up this company. It’s actually easier to do that than grow it and create more value.”

Emap sources say its sell-off plan was formulated over weeks and was not a snap decision.

Arculus’s strategy would involve stimulating top-line growth with a programme of investment in new business launches, a focus on fewer, stronger consumer brands, and a drive to motivate staff. It is thought he has several executives ready to parachute into key positions.

Arculus joined the old East Midlands Allied Press in 1972, launching a string of magazines such as Smash Hits. After leaving Emap, he chaired rival publisher IPC Media, water company Severn Trent and now sits on the board of Pearson, owner of the Financial Times.

Emap lost its way after failing to tackle the impact of the internet on its traditional business. It has reported a good level of interest at this stage of the sale, despite the credit crunch. However, United Business Media, the owner of Music Week and Farmers Guardian, has already withdrawn.

Analysts warn that recent media auctions, such as Trinity Mirror’s patchy success in offloading the Racing Post but not its Midlands titles, do not bode well. Even Emap’s French consumer magazines went for only 10 times earnings in 2006.

Patrick Wellington at Morgan Stanley voiced his doubts in a note on Friday. “There appear to be multiple potential bidders for each of the three main parts of Emap at this stage although we expect the field to thin out rapidly. There is the risk that the process fails to produce the expected value.”

Apax, Candover and Providence remain interested in Emap’s business arm, which includes Construction News. Hearst leads the way to pick up the consumer magazines, including FHM and Heat. It is expected to team up with one of the private-equity groups, Exponent or Quadrangle, shortly.

Emap claims to have the support of all its major shareholders.

Arculus was unavailable for comment.

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