Today in AMS: Stalking horses and auctions in sight

By Carmen Comment

A flurry of stories preview tomorrow’s big auction day where Judge Christopher Sontchi will decide who has the better offer for Publishers Group West: Perseus or National Book Network. PW Daily reports, as does Publishers Marketplace, that NBN President Jed Lyons promised in a letter sent to publishers yesterday that if his bid for PGW contracts prevails, he would enter into a lease with the current landlord for the current AMS/PGW warehouse in Indianapolis rather than relocating the stock to the NBN warehouse. NBN will also keep a Bay Area presence and maintain a New York office and perhaps most importantly, keep the PGW name and logo.

Some of the PGW staff members took exception to the use of their names in the NBN letter, concerned that it represented an endorsement of the NBN offer, according to Avalon president and PGW founder Charlie Winton, but Lyons said the letter was meant to show NBN’s commitment to PGW, and not as an endorsement.

Meanwhile, it looks like Baker & Taylor is well on track to set the bar for offers on AMS’s holdings, as their approximately $76 million dollar offer has officially been designated by the debtors as a “stalking horse bidder,” setting the bar for competitive–and not necessarily directly competitive–offers. The price includes $20 million for what is called “enterprise value”; $50.3 million for accounts receivable (excluding PGW); and between $6 million and $11.3 million for Advantage Publishing Group inventory. B&T will pay 75% of the full cost of accounts receivable (valued at $65 million) and for the APG inventory (valued at $8 million to $15 million).

The San Diego Union-Tribune further reported on the B&T bid, with San Diego stock analyst Bud Leedom saying it is unlikely that AMS would have announced the sale to Baker & Taylor if the creditors were not on board. “It looks like this is the better deal than selling off the company piecemeal,” Leedom said. “The creditors forced this action; it couldn’t have taken place without them.”

Finally, Peter Handel, crime fiction columnist for PAGES magazine (owned and handled by AMS) confirms the magazine is folding. He’ll post his final magazine column on his own blog in March, “when it’s relevant to the books I talk about.”