Reader’s Digest Agrees to Be Sold in $1.6 Billion Deal [New York Times]
Summary: The Reader’s Digest Association agreed to a $1.6 billion takeover offer yesterday which will end the company's run as a publicly-traded issue. While the nearly century old company is best-known for its pocket sized magazine of the same name, its holdings include several other magazines including the largest-selling North American food magazine Taste of Home and the fast-growing Everyday With Rachael Ray. The takeover is led by Ripplewood Holdings and represents a 43% premium over the company’s August year-low stock price of $11.83 (shares closed at $16.70 yesterday on news of the buyout). The investor group also includes Merrill Lynch Capital and the J. Rothschild Group; the acquisition can still be usurped by a higher bid.
Related links: Press Releases: PR Newswire • PR Newswire: Blue Harbour Group Comments on Reader's Digest Acquisition • 8K. Media coverage: Newsday.com/AP • LA Times. Commentary: Fewer Newspapers With Lower Circulation Is the Way of the Future • Newspapers: Another Slide Coming? • Barron's Buries the Lede on Newspaper Stocks.
Potentially impacted stocks and ETFs: The Reader's Digest Association (RDA), Merrill Lynch (MER) • Competitors: Tribune Company (TRB), The Washington Post (WPO), Gannett Co. (GCI), The McClatchy Company (MNI), The NY Times Company (NYT).
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