Vivendi Universal is selling its European and Latin American publishing operations to a group headed by the French media giant Lagadère, and that means that it could be several more weeks before the new owner of Houghton Mifflin is known. In its statement announcing the sale to Lagadère, Vivendi said that it is considering "starting the [HM] disposal process again" in order to attract new bidders. At press time, Vivendi said it could reopen the bidding process "soon" unless it receives a significantly higher bid by the close of business October 25 from one of the companies that have already made an offer.

At press time, no new bids had been made, and it was unclear if the three bidders—consortiums led by Blackstone/ Thomas Lee, Carlyle Group and Ripplewood Holdings—were willing to up their offers. Sources told PW that when the final bids came due, only the Blackstone consortium made an offer for all of Vivendi Universal Publishing, with Carlyle and Ripplewood bidding only on HM. Sources also said that Carlyle would keep HM intact, while Ripplewood would sell HM's college division to John Wiley and integrate the elhi operations with WRC Media, a supplementary publishing company owned by Ripplewood. The fate of HM's trade division under a successful Ripplewood bid was unclear.

Vivendi's decision to split VUP in two is meant to flush out a higher offer for HM by allowing parties to bid solely for the U.S.—based publisher. "It will take less equity to buy a smaller piece of the pie," noted Marlowe Teig, managing director of the media and publishing mergers and acquisition firm Berkery, Noyes. "By changing the dimensions of the playing field, different players may gain an advantage," Teig added.

Despite the lower entry barrier, most investment bankers didn't think any new bidders would emerge. One noted that "lots of buyout firms [Blackstone, Lee, Carlyle] are already tied up in the deal." And bankers believed no publishing company would likely enter the bidding. "The antitrust concerns of the major publishers are still there," a banker said. From the outset, bankers and other analysts doubted that the major educational publishers, such as Reed Elsevier, McGraw-Hill and Pearson, would be able to put together a deal that would satisfy government regulators.

As for the final price, bankers said Vivendi would be doing well if it got back the $2.2 billion ($1.7 million in cash) it paid for HM last year.