New York Times reports News Corp bid for S&S

New York Times reports News Corp bid for S&S

Rupert Murdoch's media giant News Corp, owner of HarperCollins, has made a bid for Simon & Schuster, according to a report in the New York Times.

The newspaper, which says its source is "three people familiar with the process who declined to be named because the matter remains confidential", claims Bertelsmann, owner of Penguin Random House, is the other leading bidder. The Financial Times suggests that French media group Vivendi may also be mulling a bid.

According to the New York Times, one of the bids currently in play exceeds $1.7bn, far above the minimum price set by parent company ViacomCBS. Several financial firms have reportedly shown interest, but are now out of the running, having placed lower offers, it says.

Final offers for the company are due before Thanksgiving on 26th November, the NYT claims.

A spokesperson from Bertelsmann told The Bookseller: "Thank you for understanding that we generally do not comment on any kind of speculations regarding market transactions. We have stated in the past that Penguin Random House wants to grow organically and through M&A [mergers and acquisitions]. This is still the case."

In an interview with the Financial Times in September, Thomas Rabe, c.e.o of Bertelsmann, said he was “interested” in S&S and would look to make a bid.  "We combined Penguin and Random House very successfully to create by far the largest book publisher in the world—actually, the only global book publisher. Given this position, we would, of course, be interested in Simon & Schuster," he said.

News Corp declined to comment to The Bookseller. Vivendi declined to comment to the FT.

In the UK, were News Corp's HarperCollins to win S&S, HarperCollins would remain as the third biggest trade publisher in the UK (according to BookScan statistics). S&S was the ninth biggest publisher in BookScan sales last year (at circa £27m), with now-acquired Egmont at £14m, which added to HC's £133m would total around £175m, leaving it still some distance behind Hachette (£205m).

In the US, HC's revenue is around $1.5bn, and combined with S&S, the fifth biggest publisher at $830m, the combined HC/S&S group would total close to $2.3 bn, just a stone's throw from Hachette US (about $2.5bn).

If Bertelsmann's Penguin Random House were to win S&S, the acquisition would further the distance between PRH and the rest of the crowd, both in the US and the UK. In the UK, based on 2019 numbers (when PRH was at £346m), that would have meant BookScan sales of £374m.  In the US PRH's revenues are around $3.3bn.  

ViacomCBS announced its intention to sell the press earlier this year, after c.e.o. Bob Bakish told an audience at Morgan Stanley’s investment conference that S&S was “not a core asset” and there had been “multiple, unsolicited” calls to buy it.