The sale of B2B magazine publisher Reed Business Information has been called off, parent company Reed Elsevier announced today.
In a statement to the London stock exchange this afternoon, Reed Elsevier said it had terminated discussions with potential bidders for the publishing division, which includes titles such as New Scientist, Variety and Travel Weekly.
But it said RBI was still considered a non-core asset by the company and it would attempt to sell it again at a later date, in the ‘medium term’when conditions in the market improve.
‘In view of the recent deterioration in macro-economic outlook and poor credit market conditions, and after discussions with short listed bidders, the board has judged it not possible to structure a transaction on acceptable terms at this time,’the company said in a statement today.
Reed Elsevier chief executive Sir Crispin Davis said: ‘RBI is a high quality business, with a strong management team and a record of success in developing online services.
‘While the short term outlook for RBI is challenging given the recent deterioration in economic outlook, we believe the business has significantly more value to our shareholders than could be realised in a transaction at this time.”
The Sutton-based publisher accounts for about 10 per cent of Reed Elsevier’s operating profits. Davis said holding on to RBI would not ‘in any way distract us from our strategic focus”.
Reed Elsevier announced it was looking to sell RBI in February because it was heavily reliant on advertising revenues and no longer fitted in with the rest of the company.
The group was reportedly in talks with a number of private equity firms including Bain Capital, which had hired former Economist Group chief executive Helen Alexander to advise on the deal.
Reed Elsevier was looking to close the deal by the end of the year. Last month, it confirmed that discussions with potential buyers were at an advanced stage but warned that there was no certainty that a ‘satisfactory outcome’could be found.
In its latest trading update, issued in November, Reed Business Information was said to have “held up well” with strong growth in online more than compensating for declines in print.
Reed Elsevier chief executive Sir Crispin Davis is retiring in March next year. His replacement is Ian Smith, the former head of construction firm Taylor Woodrow.
Shares in Reed Elsevier fell 3.4 per cent this afternoon on the back of the sale collapse news, down 16.75p at close to 478p.