After 10 months of shopping Reed Business Information (RBI), Reed Elsevier has pulled the business publications unit off the auction block. With pricing about half what had been expected back in February, the company says RBI has more value to its shareholders than it can bring in the current marketplace. RBI includes such titles as Variety, Broadcasting and Cable, Multichannel News and Publishers Weekly.
“RBI is a high quality business, with a strong management team and a record of success in developing online services. Whilst the short term outlook for RBI is challenging given the recent deterioration in economic outlook, we believe the business has significantly more value to our shareholders than could be realised in a transaction at this time. RBI accounts for less than 10% of Reed Elsevier’s operating profits and cash flows and our continuing ownership of RBI will in no way distract us from our strategic focus on delivering authoritative content through leading brands, driving online solutions, improving cost efficiency and continuing to reshape and strengthen our portfolio,” said Reed Elsevier CEO Sir Crispin Davis.
With the board of directors deciding to take the trade pubs off the auction block, RBI will be managed as a separate division within Reed Elsevier by its senior management team, led by Keith Jones, who has been appointed Chief Executive Officer of RBI. Jones was previously the CEO of RBI UK. The company said the strategy of Reed Elsevier remains to divest RBI in the medium term when conditions are more favorable. “The business will be structured and managed so as to ensure that value is maximised over the period it remains in Reed Elsevier’s ownership,” the company announcement said.
Back when the auction began it was thought that RBI might fetch around $2 billion. Most recently, it was reported that Bain Capital was the leading bidder at a price around $1 billion.
