Bankers of education publisher Houghton Mifflin Riverdeep are reportedly in an advanced stage in selling down $7.15 billion of debt in the group. The sale is largely related to its planned $4 billion deal to acquire Reed Elsevier's Harcourt US education business.
The debt placing, which is expected to price next week, is in defiance of ongoing turbulent conditions in the global credit markets. The banks - Citigroup, Lehman Brothers and Credit Suisse - committed to underwrite the Harcourt deal and the refinancing of the entire group in July. This was just weeks before the global credit markets went into a tailspin.
Publisher Reed Elsevier is to acquire an 11.8 percent stake in HM Riverdeep as part of the cash-and-stock transaction. It has already signalled its plan to find a buyer for the holding, which it took on to appease the banks financing the deal. According to analysts, the takeover is expected to create an organisation with an enterprise value of more than $10 billion.
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