REED ELSEVIER CHANGES ITS TUNE;AFTER WEEKS OF DENIALS, CONSUMER PUBLISHING UNITS ARE FOR SALE

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Reed Elsevier last week announced plans to divest several U.S., British and Dutch consumer publishing operations, after weeks of vehemently denying it would do so.

Earlier (AA, May 22, et seq.), Advertising Age reported on a meeting between Ian Irvine, co-chairman of the Anglo-Dutch publishing giant, and James Wilson, managing director of investment company Boston Ventures, and said there was speculation all or part of Cahners Publishing Co. could be spun off.

Mr. Irvine told all Cahners employees in a May 31 memo, "Cahners is not being shopped around."

Eight weeks later, he and Co-Chairman Herman Bruggink formally announced the company's divestment drive, which included Cahners' 14-title U.S. consumer unit that includes Modern Bride, American Baby and Sail.

Also for sale are U.K. consumer book publishers and regional newspapers; and several Dutch consumer magazine and newspaper publishers. Gruner & Jahr, K-III Commununications Corp., Hearst Corp., Meredith Corp. and Time Inc. are all expected to take a look at the properties.

The units have combined worldwide sales of about $900 million and industry analysts estimate they could fetch anywhere from $1 billion to $1.5 billion. "The sales will reduce the dependence on advertising by a few percentage points and clean the company of any debt," said Colin Tennant, a media analyst with UBS Phillips & Drew, London. The January '93 merger of Reed International and Elsevier N.V. shifted the combined company's direction further away from the consumer sphere and deeper into technical, scientific and business publishing. It is in those areas that the company will use long-term proceeds from a sale for acquisitions, said Nigel Stapleton, chief financial officer of Reed Elsevier.

Reed's divestment plans reinforce the difficulty in managing trade and consumer titles under the same corporate umbrella.

One of the few to do it successfully today is K-III Communications. Capital Cities/ABC still owns strong trade franchises and newspapers but had little luck when it tried to expand in consumer-oriented magazines. Times Mirror Co. failed miserably when it tried to diversify its consumer specialty magazines with a trade wing in the mid-1980s.

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