France's Lagardere Group confirms that its prime American property, Grolier Inc., is up for sale. The story was first reported by a subscription bulletin, La Lettre de l'Expansion, which predicted a deal "within the week," a time span the Group's co-CEO, Arnaud Lagardere, called premature in a follow-up interview in the Paris financial daily La Tribune on November 23, although he was willing to say an arrangement might conceivably be concluded by the end of the year. An asking price in the $400-million-$500-million range, representing a year's turnover, was also reported, although Lagardere confided to PW that these figures were not "realistic."
Grolier reportedly earns between 7% and 8% on income, a big change from the situation Lagardere's publishing affiliate Hachette found when it acquired the American encyclopedia publisher in 1992. Persistent losses led to the transfer of young Lagardere (son of the eponymous group's founder and co-CEO Jean-Luc Lagardere) to Grolier's U.S. headquarters in 1994, and the company moved into the black two years after that. (While Grolier was originally acquired by the Hachette book company, it was later placed under direct control of parent group Lagardere.)
In the Tribune interview, Arnaud Lagardere made it clear that the eventual sale of Grolier Inc. will not include Grolier Interactive, a corporate division devised by the French group to cover all new multimedia production on both sides of the Atlantic and a growing online business that includes the French portal called Club Internet. Lagardere denied a report that the sale of American Grolier was designed to raise cash to finance an investment in a French satellite TV chain and other media projects; any such participation would draw on current resources and bank loans. Groupe Lagardere's book companies make it France's number two publisher, with a 17% market share.
