The company said it could not reach acceptable terms with bidders, but that its strategy “remains to divest RBI in the medium term when conditions are more favorable.”
In the interim, RBI, which publishes Variety, will be managed as a separate division of Reed Elsevier under the leadership of Keith Jones, who has been appointed CEO of RBI. Jones was previously CEO of RBI UK.
Sir Crispin Davis, Reed Elsevier CEO, said in a statement: “RBI is a high-quality business, with a strong management team and a record of success in developing online services. Whilst 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 realized in a transaction at this time. RBI accounts for less than 10% of Reed Elsevier’s operating profits and cash flows, and our continuing ownership of RBI will in no way distract us from our strategic focus on delivering authoritative content through leading brands, driving online solutions, improving cost-efficiency and continuing to reshape and strengthen our portfolio.”
Reed Elsevier had announced in February that it planned to divest RBI. The company said the unit’s “advertising revenue model and the inherent cyclicality fit less well with the subscription-based information and work flow solutions focus of Reed Elsevier’s strategy.” Last month, the company said it was in discussions with bidders and that a consortium of banks was available to provide financing.
Earlier this week, The Independent, a U.K. newspaper, reported that Reed Elsevier appeared close to reaching a deal to sell RBI to Bain Capital for the reduced price of $1 billion, which would have been slightly more than half what Reed Elsevier had hoped to get for the property.