Reed Elsevier has halted its long-planned sale of its business-to-business magazine arm Reed Business Information (RBI), citing “poor credit market conditions.”
“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 realised in a transaction at this time,” explained Reed Elsevier CEO, Sir Crispin Davis, in a company statement.
For now, the company will hold on to RBI, managing it as a separate division within Reed Elsevier under the leadership of Keith Jones, who previously served as CEO of RBI UK. RBI’s US arm is responsible for Publishers Weekly, which reported a total average qualified circulation of 21,946 for the 12 months ending June 30, 2007 but is no longer audited by the ABC; and the 34,550 daily circulation Variety, among others. Davis noted that RBI accounts for less than 10% of Reed Elsevier’s operating profits and cash flows.
Reed Elsevier first mentioned plans to divest its b-to-b publishing arm in February. The move, which was part of a strategy to focus the business’ growth on risk management and online workflow, also pushed the company to acquire insurance industry risk management firm ChoicePoint for upwards of $4 billion.
Since February, however, the publishing market has dried up, and willing buyers have become scarce. Reed Elsevier disclosed in November that it was in serious discussions with potential buyers, who remained unnamed, but no firm deals were made. A statement from Reed Elsevier noted that the company would look to divest RBI “in the medium term when conditions are more favourable.”
