Reed Elsevier set to sell IPC Magazines as single business

Reed Elsevier has said that it intends to sell off its UK magazine business, IPC, as a single unit, although analysts maintain Reed would gain a higher price if it sold the different divisions separately.

Reed Elsevier has said that it intends to sell off its UK magazine

business, IPC, as a single unit, although analysts maintain Reed would

gain a higher price if it sold the different divisions separately.



In an internal letter to IPC employees, John Mellon, chairman of IPC and

board director of Reed Elsevier, said: ’It is Reed Elsevier’s intention

to offer IPC Magazines for sale as a whole, with the exception of New

Scientist.’ The special interest title will be retained because it fits

into the company’s scientific publishing portfolio.



Media owners including Hearst, Bertelsmann, United News & Media, Emap

and Gruner & Jaher are believed to have signalled their intention to put

forward bids, but venture capital groups are also said to be interested.

Senior sources at IPC indicate the company’s chief executive, Mike

Matthew, is also likely to put forward a management buyout bid with the

backing of a number of financial institutions. Matthew could not be

contacted to confirm this.



The sale of IPC, which owns more than 70 titles, was announced by Reed

Elsevier on Monday and is believed to have been brought forward

following speculation about Reed selling the group, which no longer fits

into its publishing portfolio.



SBC Warburg Dillon Read has been appointed to handle the sale, which

will be completed by the end of February 1998. City analysts put the

value of IPC at around pounds 750 million, dismissing suggestions that

the sale could reach as much as pounds 1billion.



It is understood that tax laws, which have dissuaded Reed from going

through with the sale until now, are likely to change in the

Chancellor’s next Budget.



Topics