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PublishersLunch

Liberty Media Now Favors Other Options Instead of Outright BN Buy

In the more than three months since Liberty Media stated its intention to buy a 70 percent stake in Barnes & Noble at 17 dollars a share, further reports suggested that prospect had dimmed, or at least put on hold. Then on Wednesday morning a report by dealReporter - which has a hit-or-miss track record on such things - intimated that "constraints on financing had quieted deal talk" and that Liberty was leaning towards "a preferred share investment."

Per "two sources familiar with the situation and an industry banker following the situation," the original deal wasn't off the table, but the market's continuing volatility made a minority stake the more attractive option for Liberty. The same sources said Liberty was still the only bidder for BN, despite some spurious rumors in financial circles that Wal-Mart was interested in buying. (One can take a different grain from the same salt that produced equally laughable rumors of Apple's interest earlier this month.)

The NYT followed with its report "according to a person briefed on the matter", more or less confirming dealReporter's story but emphasizing the likelihood of Liberty taking a minority investment in BN. The news caused the bookseller's stock to drop by as much as 12 percent before settling in at 12.99 by the end of trading Wednesday, or a 10.95 percent decrease. (It's down nearly 2 percent this morning, too.)
dealReporter
NYT

McGraw-Hill Exploring Separation of Education Business

For years investors have disapproved of McGraw-Hill's portfolio, which folds the S&P Credit Ratings Agency, Education, and other unrelated businesses under the same umbrella. Recent share pickups by activist hedge fund Jana Partners in tandem with the Ontario Teachers Pension Fund heightened calls for the company to break up, sell, or spin off some of its divisions - especially the education side, the largest group within the company.

The WSJ first reported, with other outlets following with their own unnamed sources or "people briefed on the matter" that McGraw-Hill retained investment bank Evercore Partners to advise the company on a possible separation of the education division. Evercore's task, part of McGraw-Hill's larger operational review which the company discussed on its most recent earnings calls, was to see if as separation was viable and, if it was, whether the division should be sold, spun off or offered in a share sale. Per the WSJ a sale appears unlikely now for tax reasons, but if the education division became a standalone unit through a spinoff, sale talks may come at a later date.
WSJ
NYT