Emap was left reeling yesterday by its failure to sell its business-to-business operations, the media company’s most-prized asset.

It confirmed that it had shelved the sale after offers for the unit valued the group as a whole at less than 950p a share.

The company is left as a listed business running trade magazines and a conference business after managing to sell the less highly rated consumer magazines and radio businesses to Bauer, of Germany, for just over £1.1 billion.

Negotiations between bidders and Emap’s advisers over the business-to-business sale began to unravel on Thursday night. It is understood that the bidders - which included consortiums of Apax Partners and Guardian Media Group; Cinven and Candover; and Providence and Permira – were concerned about the possibility of certain hidden liabilities, despite assurance from management that there were none.

The City reacted badly to news of the failure to sell the group’s core operations, sending Emap’s shares down 78½p to 746½p.

While Emap said that it would return £1 billion to shareholders after the sale to Bauer Publishing, sources said that investors had hoped for another £1.2 billion with a sale of the entire company. The company said that the method and timing of the return of proceeds would be announced in due course.

Emap said that it had “assessed all options for Emap Communications” including an outright sale, but had decided that “the best value for shareholders” would be to remain as a stand-alone business-to-business publisher.

Sources close to Emap said that the group had decided that it made greater sense to hold on to the business-to-business operations and use it as a platform for further consolidation. It is understood that the company will investigate merging with rivals in the sector.

Emap also confirmed that it had entered into agreements with Bauer to sell Emap Consumer Media, which is behind FHM, Heat and Grazia, and Emap Radio for a total of £1.14 billion.

The magazines business went for £718 million, higher than expected, and Bauer paid £422 million for Emap’s radio business.

Heinz Bauer, who owns 96 per cent of the company, last night issued a statement saying that his planned purchase of Emap “fits perfectly” with the group’s strategy of international expansion. The company added that further details of the bid will be announced on December 12.

It is not known if David Goodchild, the managing director of Bauer’s UK operations, will also take charge of the Emap businesses. The disposals are subject to the approval of Emap’s annual meeting next month.

The sale of the radio business is also conditional on completion of the sale of Emap’s Irish radio business. The sale of the consumer magazines depends on competition clearance in Germany and Austria.

Derek Carter, the head of the business-to business operations takes charge of what left of the listed group. Ian Griffiths, the finance director, will become deputy chief executive of Emap while continuing to carry out his finance director duties. Alun Cathcart, Emap’s executive chairman who oversaw the bidding process, will revert to the nonexecutive chairman’s role until a replacement is found.

Emap said that trading since the half-year results to September 30 had been in line with expectations.

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