Reed Elsevier likely to hold on to IPC because of UK tax regulations

Analysts have poured cold water on the fevered speculation that Reed Elsevier is about to sell off its consumer magazine arm, IPC, in the wake of its pounds 20 billion merger with the rival publisher, Wolters Kluwer.

Analysts have poured cold water on the fevered speculation that

Reed Elsevier is about to sell off its consumer magazine arm, IPC, in

the wake of its pounds 20 billion merger with the rival publisher,

Wolters Kluwer.



The Anglo-Dutch company is expected to concentrate on consolidating its

position as the world’s biggest publisher of professional and scientific

information.



Nigel Stapleton, the co-chairman of Reed Elsevier, fuelled the sell-off

speculation when he was reported in Tuesday’s Times as saying:

’Obviously it’s an issue in that when there is an exception to our

strategy ... it is more of an issue than when it is entirely in line

with strategy.’



Mike Matthews, the chief executive of IPC, was not available for comment

and a Reed spokesperson refused to give any clarification.



However, analysts said this week that any sale of IPC was likely to be

on hold because of tax restraints, which dictate that a certain

proportion of a company’s profits must be generated inside the UK if

that company is not to incur unrelieved advance corporation tax. Most of

Reed’s interests are based outside the UK, making the London-based IPC a

valuable asset.



Paul Richards, media analyst at Panmure Gordon, said: ’IPC has stuck out

like a sore thumb for a while (in Reed Elsevier’s portfolio), but it

hasn’t disposed of it because of the UK tax situation. The disposal of

IPC will be driven by changes in tax rules.’



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