AOL Time Warner rounded up final bids for its book publishing division auction, moving one step closer to a key cash-raising sale to help the beleaguered media giant pare down debt and restore investor confidence.
Final bids for the unit, which includes Warner Books and Little, Brown & Co., were due yesterday evening, sources close to the auction said.
Companies expected to submit bids to Merrill Lynch, the investment bank handling the process, include: a group led by financier Frank Pearl, founder of Perseus Books Group; Viacom, parent of Simon & Schuster; and Bertelsmann, the owner of Random House.
Pearson, through its Penguin Books division, was also expected to submit a bid. However, the British media concern is believed to be interested only in the European publishing assets.
Representatives of the companies could not be reached for comment at press time.
The publishing unit – the nation’s fifth-biggest consumer book publisher, with $350 million to $400 million in annual revenue – will likely fetch roughly $350 million.
The book industry has been reeling from its own recession; even in good times the margins are low. Concerns over the future profitability of the business, coupled with the general uncertainty surrounding the global economy, caused a few possible buyers – including Britain’s W.H. Smith – to drop out of the running.
AOL is under pressure to pay down some of its $26 billion debt. Earlier this week, it announced a deal to sell its 50 percent stake in Comedy Central to the network’s other owner, Viacom, for $1.23 billion.