Publishers Welcome NBN Bid, Want Quick Resolution

by Jim Milliot & Claire Kirch, PW Daily -- Publishers Weekly, 2/8/2007

Many PGW publishers, to no one's surprise, welcomed the news that a second company had stepped forward offering to buy the distributor. The consensus among publishers is that there is no reason not to sign the NBN offer, and that the bankruptcy court will decide what the best proposal is. As one now cynical publisher observed, "All the judge cares about, one must assume, is maximizing the size of the estate."

Prompted in part by the NBN offer, several parties have filed motions with the court asking for a delay in ruling on the Perseus bid, which is now set for February 12. In a motion filed yesterday, the unsecured creditors committee objected to a request by AMS that the court approve the sale to Perseus without the need for an auction or other procedures "to test the adequacy of the proposed transaction." Moving forward on the proposed time line, the objection states, "does not allow for adequate time for the post-petition solicitation of purchasers and for competitive bidding."

Despite the motion from the committee, comprising two PGW clients and three large publishers, PGW publishers favor a quick resolution of the two offers, as do Perseus and NBN. "I'd like for this to move quickly," said Hilary Reeves, managing editor of Milkweed Editions. "We're glad to have the offers and we don't want there to be any delays in rulings." Perseus's David Steinberger and NBN's Jed Lyons both said they are prepared to have the court rule on Monday. "We think a delay would be dangerous for the publishers," Steinberger said. Lyons said he "has no interest in pushing off the date." Perseus has "contracts in hand" from about 60% of PGW's publishers, Steinberger said, while NBN has received approximately 12 contracts. Lyons said he is prepared to go to court Monday with as many contracts as he has received. Under bankruptcy rules, publishers can sign offers from both Perseus and NBN, since the bankruptcy judge will make the final determination on what offer to accept. Steinberger shot down speculation that Perseus may up its offer for PGW in the wake of the NBN bid. "We feel our offer is fair and we've received lots of publisher support," he said.