Wed, Feb 08, 2006 page12

• Time Warner to unload book publishing group

  SHEDDING ASSETS The US company, which has been under pressure to downsize from a leading investor, will sell its book group to the French media conglomerate Lagardere

  • NY TIMES NEWS SERVICE
  • • 
    • 
    • 

  Time Warner Inc said on Monday that it had agreed to sell its Time Warner Book Group, the country's fifth-largest publisher of general-interest books, for US$537.5 million to Lagardere, the French media and defense conglomerate that also owns the Hachette magazine and book groups.

  The sale, which comes as the billionaire investor Carl Icahn has been pressuring Time Warner to improve its financial performance and to shed assets, follows two years of strong growth in the book division. Although Time Warner does not break out the publishing unit's sales and profits, the company has said the book group earned record profit last year as sales rose well above US$500 million.

  For Lagardere, the acquisition is the latest step in its effort to expand its reach and return to the US. Lagardere has not owned a US publisher since it sold Grolier, a children's reference publisher, to Scholastic Inc in 2000. But it has been considered a possible buyer of a US publishing company at a time when some large media conglomerates, including Time Warner, have found that their publishing units have not created the business possibilities that they had hoped.

  No synergies

  Media conglomerates like Viacom had long hoped to benefit from owning both movie companies and book publishers, but the company recently separated and grouped its publishing unit, Simon & Schuster, with the CBS network assets and not with its film studios. Simon & Schuster is thought to be a possible candidate for sale.

  Robert Broadwater, a managing director at Veronis Suhler Stevenson, a media industry investment bank, said, "I don't believe there has been any demonstrable synergies between owning a book publishing company and other entertainment assets," because authors typically sell the movie rights of books separately.

  Broadwater said that the sale price for the Time Warner unit, at about one times revenue, was in line with expectations that the publishing business is not expected to grow quickly.

  Lagardere could make better use of the company than Time Warner, Broadwater said, because its global book business gives it better opportunities to exploit the purchase of world publishing rights from authors.

  Failed sale

  The sale comes three years after Time Warner tried and failed to sell the book group. It was forced to take the unit off the market when potential buyers, including Bertelsmann, the German media giant that owns Random House, would not meet the US$350 million price that Time Warner was asking.

  David Young, who took over as chairman and chief executive of the Time Warner Book Group last year after the retirement of Laurence Kirshbaum, said in an interview that he expected that the book group would continue operating autonomously in the US with its current management team.

  The company, whose Warner Books and Little, Brown & Co imprints publish such best-selling authors as David Baldacci, James Patterson and Malcolm Gladwell, has the right to continue to use the Warner name on its books for up to five years.

  Lagardere is primarily a media company, with holdings that include Hachette Filipacchi, publisher of Elle, Premiere, and Car and Driver magazines, and Hachette Livre, which two years ago bought Hodder Headline, one of the largest British publishing companies.
• Most Popular

  • 1

    Iran’s supreme leader Khamenei killed

  • 2

    For Bangladesh, just playing is a win

  • 3

    Iran prepare for Women’s Asian Cup in Australia as bombs drop on homeland

  • 4

    Marco Bezzecchi wins MotoGP opener

  • 5

    Liverpool rocked by last-gasp defeat at Wolves