The Big Deal Returns

I was lamenting recently that there hadn't been too many mega publishing deals this year and all of a sudden they are numerous.

In June, I mentioned that CEO Richard Harrington had been quoted in the FT regarding Thomson's willingness to part with their educational division. They rapidly back tracked and in truth the context of his comments were along the lines of "...if someone offers us a good price, we can put the money to good use on the legal and regulatory and financial segments of our business." Clearly, they have had a think about this and last week publicly stated their intention to divest the business unit. I suspect it will go to a financial buyer; this is not a particularly integrated operating unit and I think a buyer could exact some significant expense savings in aggressively consolidating these business units and product lines. Once that is done the group could be resold or sold in parts to other educational publishers.
(Toronto Star, Bloomberg)

Further interest in education from an Irish based educational technology company (The Learning Company and Edusoft-not this one -my error) which is interested in purchasing Houghton Mifflin from the financial buyers who have owned the company for only a few years. Houghton Mifflin is a venerable old line educational publisher which has gone through some hairy times as a public company, Vivendi (and collapse thereof), and then a buyout. Riverdeep will likely bring some long term stability.
(Boston Globe, FinFacts Ireland) Also here is a jealousy inducing analysis of the ownership structure of the merged entity.

Springer Science and Business Media has launched a $5bill bid for Informa which is itself a recent result of a large merger of Taylor and Francis and Informa. Apparently, Informa wanted to buy Springer Science rather than the other way around. Oopps.

Media Ownership laws have recently been changed in Australia and pundits were anticipating a surge in new deals. Irishman Tony O'Reilly who owns a media empire (and was head of Heinz) has offered to buy APN the forth largest newspaper publisher in OZ. The same article also lists some of the other recent media deals in Australia including Murdoch's purchase of 7% of Fairfax the publisher of the Sydney Morning Herald.

And for other pending deals?

Publisher's Lunch reported on the pop that B&N stock received this week when Barron's reported that private equity would find the company an attractive investment. The Riggios (majority owners) announced earlier this year that they were buying back stock and the share price is sharply up this year even without the Barron's article. In my view, it is difficult to see the value to the majority owners of a private equity play.

Reuters has been struggling - I wonder if Thomson would see this as an interesting addition to their portfolio. The company has been in the process of remodeling itself over the past several years and are still working through this. They are not out of the woods yet.

Bloomberg. The NYC mayor has said this week that he is not going to sell the company but it is not clear if he will return to manage it. He has consistently indicated that he wants to concentrate on his charitable and foundation work once his term in office is completed. Again, a potential match for Thomson once they have the war chest.

Reed Elsevier - could they go the way of VNU and be purchased by a PE firm? Undoubtedly, all the bigger players have been looking for new targets and Reed has strong branding and positioning in trade magazines, legal and education.