Reed Elsevier to Increase Loan Package for RBI Buyer Significantly

first_img“The key to this will be how much more financing Reed itself will carry,” a knowledgeable M&A source told FOLIO: during a recent interview. “After that, will Reed be willing to take a deal that’s below their expectations? One that’s, say, 8X not 10X [EBITDA]? That’s what it’ll come down to.”The three bidders remaining in the third round are said to be Bain Capital, TPG and a partnership formed by Strauss Zelnick, a former non-executive director of Reed Elsevier. RBI publishes a number of trade magazines including Variety and Publishers Weekly.When Reed posted its financial results for the first half, the company indicated that it expected the RBI auction to be complete by year’s end. Longtime Reed CEO Sir Crispin Davis is expected to step down from his post sometime early next year. In the face of the tumultuous global credit market, Reed Elsevier is ready to “significantly” increase the amount of the financing package it plans to offer the potential buyer for its b-to-b publisher arm Reed Business Information.The London-based publisher and events producer is willing to be “more flexible” and increase the amount of vendor financing from the company’s own balance sheet, according to a report in England’s Telegraph newspaper. Exactly how much the company is willing to “sweeten” the deal was not immediately clear. A company spokesperson could not be reached for comment.The sale has been on rocky ground ever since at least one of the banks in the consortium put together by Reed to lend the eventual buyer more than $1 billion in staple financing backed out. The situation was recently compounded when a ratings agency, Fitch Ratings, downgraded RBI’s outlook from stable to negative.last_img

Post A Comment

Your email address will not be published. Required fields are marked *