RBI offers drop dramatically

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The economic downturn has seen Reed Business Information’s value plummet from the initial £1.25bn to below £1bn, putting the sale by its Anglo-Dutch downer Reed Elsevier in jeopardy, reports the Financial Times.

Bidders in the third round for the B2B publisher are now considering much lower offers. One person involved in the deal told the Financial Times ‘Just how much below £1bn remains to be seen. Reed Elsevier won’t sell at any price but buyers can’t ignore what they are hearing and seeing in the marketplace.”

One analyst said: “I think it is worth Reed’s while to sell low. If RBI went for £750m rather than £1bn, all they lose is £250m of cash. While it is helpful to have that on the balance sheet, at the end of the day it is only £10m of extra interest.

“The alternative is that . . . the market automatically values RBI in the sum of parts at £750m-£800m anyway and you get left with a cyclical business that will see downgrades and will be under pressure for a couple of years.”

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