The verdict is in and the answer is: no sale. Reed Elsevier (NYSE: RUK) has announced that its torturous, nine-month campaign to sell the B2B magazine division is over. Reed announced to the stock market this afternoon that it has “terminated discussions with potential bidders” and that due to the poor economic outlook, shareholders would get more value by the company hanging on to the Farmers’ Weekly and Variety publisher. RBI now remains separate business and will be run by RBI UK CEO Keith Jones as overall CEO of the company.
But it’s still not over: Reed wants to sell RBI in the “medium term when conditions are more favourable” and in meantime RBI will be “structured and managed” to make it as profitable as possible. And that normally means redundancies, magazine sell-offs or both. As former CEO of RBI’s US division Jim Casella has suggested, a broken up RBI would be more attractive to investors and easier to sell. These are all issues Ian Smith will be tackling when he starts as Reed CEO on January 1.
Out-going Reed CEO Sir Crispin Davies says the decision was one of realism: