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@ FOBM: Ex-RBI CEO To Reed: Cut Asking Price, Break It Up

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Reed Elsevier (NYSE: RUK) is unlikely to sell its Reed Business Information (RBI) as a whole entity and must cut its asking price, the former US CEO of the UK-based B2B publishing unit has warned. Jim Casella, who spent four years at RBI until 2005, told our Future Of Business Media conference in New York City: “The price expectation has to come down, it’s going to have to be adjusted. It’s going to be a question of seller financing, whether they hold some equity like they did in the Harcourt deal; I think you’re going to see people do a combination if they really want to get deals through.”

Reed was already offering a $330 million loan to woo buyers for RBI, publisher of New Scientist and Farmer’s Weekly. Yesterday, it emerged it will pony up even more – and we learned three bidders are left including a consortium comprising ex WSJ publisher Gordon Crovitz and private equity houses Apollo and Zelnick.

More after the jump

Continuing, Casella – now CEO of his Case Interactive Media investor – told our moderator and ContentNext publisher Rafat Ali that RBI isn’t a perfect acquisition right now: “It’s logical that you’d (have to) be looking to buy events to go along with the company since exhibitions don’t come with the property.” Could it be broken up? “I think there’s a very good possibility there’s certain assets (buyers) want to focus on and others they want to dispose of. A new owner is going to want to follow a more focused strategy; I think there will be disposals.”

B2B publishers have been in-play for M&A this year, but are clearly getting munched by the credit crunch. The leading bid for Lloyd

2 Responses to “@ FOBM: Ex-RBI CEO To Reed: Cut Asking Price, Break It Up”

  1. David Graham

    I agree with you sir! The cobbled together mess that makes-up RBI holds a diminished value to any would-be buyer simply because of its non-cohesive nature. Break it up, couple together natural affinities and allow the buyers to figure-out the non-intuitive couplings. This will get the deal done and the cash raised to assist the ChoicePoint financing and liability ratios.

    In the future I encourage Reed to dispose of future dealings with UBS as their lack of insightful leadership in promoting viable sell options has lengthened the time to transaction. Poor, very poor.