July 24 – July 31, 2008 Edition

McGraw-Hill Among
Bidders for Reed’s
Magazine Division

LONDON/7/20/08– Reed Business Information (RBI), whose titles include Publishers Weekly, and film industry bible Variety, Flight International and New Scientist, began the process of selling its magazine division last week by sending packets of information out to prospective bidders, according to the London Telegraph, Potential buyers include McGraw-Hill and the private equity firms of Bain and TPG, among about two dozen who have an interest in acquiring the properties. The story broke in London’s Telegraph, if a successful bidder pays the asking price, it will be the biggest media takeover since the sale of Emap at the end of last year, according to the Telegraph.

Reed, determined to get out of advertising-based media, is offering to lend around £160m to the successful bidder. Another £560m million, which is 3.5 times the division’s underlying earnings of £160m, will be offered as a loan by a consortium of banks, suggesting that private equity firms will be involved in the acquisition. The magazine division is valued at £1.25bn. RBI is the largest business publisher in North America, which publishes more than 80 magazines.

The McGraw Hill Companies owns Standard & Poor’s credit rating agency, and publishes several magazines, including Aviation Week.

The money raised from RBI will help offset the £2.1bn acquisition of ChoicePoint, a risk management database used by insurers, and any future purchases, the Telegraph said.