Moody’s Investors Service lowered its ratings outlook on Bertelsmann, citing the advertising-market slump, waning consumer spending, weakening sales in the company’s book-publishing and magazine segments and the expectation of “further declines” this year. The ratings service expressed worries about the company’s ability to control debt that could “well come under additional pressure in 2009 given the difficult operating environment,” Nonetheless, Moody’s said Bertelsmann has “adequate” liquidity to meet its near-term needs.WSJ Separately, Standard & Poor’s reduced their rating on Scholastic to “BB-” last week, a day after Moody’s also downgraded the publisher’s debt. S&P credit analyst Tulip Lim said the […]
Finance
BAM Board Buys Up $8M of Stock
Books-A-Million’s board of directors has put into effect a plan to buy up to $5 million in shares of company stock as of April 30, replacing a previous plan where BAM bought $1.8 million of its stock. The company has 15.6 million shares of stock currently worth about $68.1 million.
Informa Cuts Final Dividend to Reduce Net Debts
The publishing and events group is targeting debts of below £1bn but insisted there was no danger of banking covenants being breached. The final dividend, down at 3.9p from 11.3p, will be paid on 3 July.Telegraph
Houghton Mifflin Harcourt Sale Scratched; Debt Renegotiation Finalized
As the Wall Street Journal first reported yesterday, Education Media and Publishing ceo Barry O’Callaghan says “we concluded that the offers we’ve received were less than what the business was worth in terms of long-term value and long-term profitability” so they are calling off a sale of Houghton Mifflin Harcourt. O’Callaghan says there were three bidders for the trade publisher, with estimated annual sales of $150 million to $200 million.WSJ Separately, Houghton Mifflin ceo Tony Lucki tells the Boston Globe the unit comprises about 5 percent of Houghton’s profits, and less than 10 percent of sales. He insists “the offers). […]
Borders to Ask for Reverse Stock Split
At their annual meeting on May 21, Borders will seek shareholder approval for a reverse stock split to help bring the company into compliance with New York Stock Exchange listing rules. The split still might not happen, though, since the company also needs a higher market capitalization to meet the Exchange’s rules.Release
HMH Trying to Renegotiate Debt Covenants After All
Having heatedly taken issue with recent ratings downgrades by both Moody’s and Standard & Poor’s, Houghton Mifflin Harcourt parent company Education Media & Publishing is talking to its primary lenders–who hold $4.3 billion in debt–about renegotiating the terms to loosen the multiples in their covenants. As the FT reports, the notes currently require that EMP’s debt be no more than 8.75 times ebidta by March 31. The company seeks to raise that multiple to 9.95 times earnings, and wants to raise the March 2010 target from 6.5 times ebitda to a 7.45 multiple. Lenders are being offered a small fee […]