Taylor & Francis enters fray for Bertelsmann journals unit

Taylor & Francis, the publisher, will this week formally enter the ¤1bn (£700m) bidding war for Bertelsmann's scientific books and journals business.

The British science publisher, which has teamed up with Apax, the private equity house, is thought to be the only trade buyer involved in the auction of the Bertelsmann Springer business, being conducted by Merrill Lynch. There was some speculation that Reed Elsevier would also show interest but the company faces much greater regulatory problems and its chief executive, Crispin Davis, recently ruled out any more sizeable acquisitions.

Taylor & Francis has pulled off 10 acquisitions since its flotation in 1998 but it has also been foiled on several occasions. This time, its main competition will probably come from a joint Cinven/Candover bid ­ which recently beat Taylor & Francis to the £380m acquisition of Kluwer Academic Publishing. Last year, Taylor & Francis tabled an unsuccessful £300m bid for the privately owned Blackwell's.

Richard Menzies-Gow, an analyst at Dresdner Kleinwort Wasserstein, said: "Taylor & Francis have the management and can extract synergies. They have definitely got a better go at it as they're working with Apax. Their problem is that Cinven overpaid for Kluwer, so they really have to get this business [Springer] in order to put the two together."

Mr Menzies-Gow said Taylor & Francis, now led by David Smith, may opt for a rights issue if it is successful. He added that the Cinven/Candover alliance may make a bid for Taylor & Francis if it gets Bertelsmann Springer.

The other contenders for Bertelsmann Springer are all reckoned to be private equity houses, including a consortium of CVC Capital Partners and Blackstone Group. BC Partners, Charterhouse and Soros Private Equity Partners are also thought to be considering a bid. The cash-generative nature of Bertelsmann Springer and the relative resilience of this sector of media to economic downturns makes it attractive to financial buyers.

Berlin-based Bertelsmann, which is urgently trying to reduce its debts, wants firm bids for the business by the end of this week. There will then be further bid rounds but the German company wants the process complete by the summer.