The long process of trying to sell the trade publication business of Reed Elsevier may be near an end – and the end could be no sale. The final bids are reported to be about half what had originally been expected. Will a buyer be found for such titles as Variety, Broadcasting and Cable, Multichannel News and Publishers Weekly?
Back when the parent company put Reed Business Information (RBI) up for sale in February there were hopes of getting around $2 billion for the group of business publications. Since then, of course, the advertising slump has gotten worse and the financial markets have gone into a tailspin. Even with Reed Elsevier reportedly offering at one point to hold some seller paper, it was difficult for would-be buyers to line up financing.
In an update to financial analysts last week, Reed Elsevier cautioned that “the process of divestment of Reed Business Information is at an advanced stage, although in the present economic and credit environment a satisfactory outcome cannot be certain. CEO Crispin David had hoped to complete a sale of RBI before his retirement in March, but he may call off the sale process if the bids are too low.
According to both Bloomberg and the Financial Times, bidding interest from the three remaining private-equity backed groups has fallen to the neighborhood of $1 billion. At that price, Reed Elsevier may decide not to sell.
Some observers think Reed Elsevier beat The Nielsen Company to the punch by being first to the market to try to sell off its trade pub division. In his quarterly Wall Street conference call this month, Nielsen CEO David Calhoun was resigned to watching revenues for the trade pubs decline for the next couple of years while they transition from paper to electronic delivery.
RBR/TVBR observation: The print trade business is tough and getting tougher. Just ask our publisher, Jim Carnegie. He took the leap and made RBR/TVBR all electronic just about a year ago. It’s a difficult transition, but it’s where print publications have to go to survive. (And not all will.)