Publisher Reed Elsevier, Netherlands, is offering $330 million from its own accounts in vendor financing for the sale of its trade publications unit, Reed Business Information (RBI), according to a Reuters report. Also, the company has reportedly put together a $1.26 billion staple financing package from a consortium of banks.
The sale of RBI, whose titles include New Scientist and Flight International, began in July when information was sent to potential bidders. RBI is the largest B2B publisher in North America, with 2,500 employees and 80 magazines.
The publisher's offer to provide a vendor loan from its balance sheet reflects a rising trend intended at reducing the amount of debt a bidder needs and to reduce leverage ratios in asset sales. Earlier last month, several bidders submitted first-round offers for the unit valuing the unit at £1-£1.25 billion. According to sources, private equity firms Apax Partners, Candover Investments, Cinven and Permira have opted out after bidding in the first round.
Bidders were allowed to re-bid for the unit prior to an 'official' second round. However, the newer bids came in 'slightly lower' than those in the first round. The second round is due September 18.
German publishing house Gruner + Jahr, part of media group Bertelsmann AG, has confirmed that it is also involved in the second round of bidding for the division. Head of private equity group ZelnickMedia, Strauss Zelnick, has also teamed up with Apollo Management to bid for the unit. US publishing group McGraw Hill is reported to have submitted a joint offer with private equity firms Advent and Quadrangle, but is only interested in RBI's aviation and health care titles. In addition to bids for the whole division, Reed is also believed to be considering offers for just part of the business.
