News Corp ready £1bn Penguin bid
on 28/10/2012 12:42:50
News Corp, whose chairman and chief executive is Rupert Murdoch, is thought to have indicated to Penguin's owner Pearson that it will make a substantial cash offer for the publisher which accounts for around 12% of British book sales.
The interest, reported in The Sunday Times newspaper, comes as the owners of Penguin and Random House, two of the world's "big six" publishers, continue talks over a combination that will create a business worth £2.4bn (€2.98bn).
Germany's Bertelsmann, which owns Fifty Shades of Grey publisher Random House, will hold 60% of the new business if the deal with Pearson goes through.
The union would have an estimated 30% share of English-language book sales, compared with 20% for a HarperCollins and Penguin tie-up.
Pearson, which also owns the Financial Times, said on Thursday it had not reached an agreement with Bertelsmann and that there is no certainty of a deal.
The combined company would be home to writers as diverse as Jack Reacher creator Lee Child at Random House and Penguin's long list of classical authors such as Charles Dickens and Jane Austen.
The other publishers in the "big six" are Hachette, Simon & Schuster and Macmillan.
Their power to set prices has been eroded by the boom in digital sales and the rise of Amazon which reportedly controls an estimated two-thirds of American print and ebook sales.
Any combination involving two of the world's biggest publishers will face scrutiny from competition authorities, with a deal involving HarperCollins likely to face fewer regulatory hurdles in the US and Europe.
The UK division of HarperCollins publishes around 1,000 books a year and employs 850 people in London and Glasgow. Its recent successes include the Booker-winning Wolf Hall by Hilary Mantel and George RR Martin's A Song Of Ice And Fire series. The children's business includes Paddington Bear and Noddy.