MAIN NEWS HEADLINES
September 4 – September 11, 2008 Edition
Bertelsmann’s
Publishing Unit May
Drop Bid for Reed
GERMANY/9/4/08–Gruner + Jahr, whose parent company is media giant Bertelsmann, may be backing out of an offer to acquire Reed Elsevier’s Business Information unit, valued at about £1bn. Although Bertelsmann had announced August 22 that its Gruner + Jahr publishing subsidiary would be among bidders, Bertelsmann’s new chief executive Hartmut Ostrowski told the Financial Times last week that "Whether we’ll even make a binding offer isn’t clear at the moment. We’re not under pressure [to make acquisitions]. " Two people familiar with the company’s thinking said no deals were imminent, according to the report.
Apparently Ostrowski’s new management team is faced with some inherited financial constraints and has been paring back unprofitable segments of the company. Direct Group, the book club group, is being dismantled and Bertelsmann’s 50% stake in Sony BMG recorded music joint venture has been sold to Sony for €900m ($1.32bn), The Times said.
Thomas Rabe, Bertelsmann’s chief financial officer, added that its preference would be for businesses which could produce top-line growth of at least 4 per cent.
Gruner + Jahr – 75% of which is owned by Bertelsmann and 25% by the Jahr family – is a major magazine and newspaper publisher, reporting sales of €2.83bn and an operating profit of €264m last st year. The Hamburg-based group’s 500 titles include the news weekly Stern and the business daily FT Deutschland. Gruner + Jahr’s chairman and chief executive, Bernd Kundrun, has said that he is looking for acquisitions in new areas.
Reed Business Information includes titles such as Publishers Weekly, Variety, New Scientist and Farmers Weekly. Reed the full story in the Financial Times.
