NBN Makes Offer for PGW

by Jim Milliot, PW Daily -- Publishers Weekly, 2/7/2007

National Book Network has proposed taking over the distribution contracts of PGW clients, offering to pay 85 cents for every dollar owed publishers in the AMS bankruptcy and asking for a three-year contract extension. The proposal, which was made last night, compares to the 70 cents/four year extension offer made by Perseus Books Group. To help win the backing of the creditors’ committee and approval from the bankruptcy judge, NBN has filed an unsecured claim to retrieve the balance of the funds—rather than an administrative claim, as Perseus has—a move that could leave more money for all creditors to be paid.

NBN president Jed Lyons said the company plans to extend its offer to all PGW clients. He said NBN has received “extensive expressions of interest” in its proposal since letters went out last night. In the letter accompanying NBN’s offer, PGW president Rich Freese noted that any PGW client that has already signed an agreement with Perseus can also sign an agreement with NBN. Freese said that the bankruptcy court will approve one of the proposals and the “winning” purchaser’s offer will be valid and enforceable. Freese, who once worked at NBN, added. “I know that NBN appreciates PGW’s close relationship with our customers and will undoubtedly maintain the high level of service and reliability that you have come to expect from PGW.”

In NBN’s proposal, Lyons said NBN “will try to find a role for as many PGW reps as possible,” and will maintain a California office. For the near term, distribution will be split between PGW’s Indianapolis facility and NBN’s Blue Ridge Summit warehouse “until we decide where to consolidate the order fulfillment process.”

The bankruptcy court is scheduled to rule on the Perseus/NBN offers February 12.