Reed Elsevier has signaled its intention to find a buyer for its 11.8 percent stake (valued at approximately $300 million) in Riverdeep, according to the Irish Independent. The stake forms part of Reed Elsevier’s recent deal to sell its Harcourt US schools education business to HM Riverdeep, which is headed by Barry O’Callaghan, for $4m.
It is understood that Reed agreed to take a stake in order to appease the debt backers of the HM Riverdeep deal, which will create a publishing giant with an enterprise value of about $10bn. Some $7.4bn of this will be comprised of debt. “We don’t take the view that’s a long-term shareholding,” Reed’s chief executive Sir Crispin Davis was quoted as saying yesterday, raising the spectre of the stock being sold soon after the deal is completed. Meanwhile, Sir Crispin said he was confident that HM Riverdeep had the financing in place to complete the transaction, expected to close in late 2007 or early 2008 after regulatory reviews have been completed.