Bidders for Anglo-Dutch publisher Reed Elsevier’s trade magazine unit were allowed to re-bid last week, and bids came in slightly lower than the first round, sources briefed on the matter said.
Several bidders submitted first-round offers for Reed Business Information earlier this month, valuing the publisher of Variety, Farmers Weekly and New Scientist at between £1bn and £1.25bn (US$1.9bn to US$2.3bn).
The re-bids, not officially a second round, were allowed because bidders felt they were not provided enough information on the business in the first round, the sources said.
After being presented with more information, the newer bids came in ‘slightly lower’ than those in the first round, one of the sources said. All bids were non-binding.
Yet more information on the unit is expected to be provided to bidders in the next few days, and a final round of offers will likely be due in early October, one source said.
Reed put the unit on the block in February to reduce exposure to cyclical advertising markets.
A number of private equity firms on both sides of the Atlantic are vying for the assets.
They include Europe’s Candover together with Cinven Ltd; Texas-based TPG; Boston-based Bain; Rhode Island-based Providence Equity Partners; and U.S.-based Quadrangle and Advent together with U.S. publisher McGraw Hill Cos Inc, separate sources have told Reuters.
German publishing house Gruner + Jahr, part of media group Bertelsmann, said last week it was also involved in the second round of bidding for Reed Business Information.
The auction is being closely watched because it signals the return of private-equity players after a year-long retreat.
The credit crunch, which hit a year ago, made financing of large leveraged buyouts very difficult and severely limited the ability for buyout firms to invest money.
Reed Business Information’s revenue is split roughly evenly between the United States, UK and the rest of Europe, and it was unclear how many bidders had bid for the entire unit. Some have offered to buy a regional part of the unit, sources said.
Reed Chief Executive Crispin Davis has said the unit is not growing fast enough and is too reliant on advertising revenue.