Reed to lose pounds 40m on BSkyB exit

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The Independent Online
REED Elsevier, the Anglo-Dutch publishing group, is set to lose more than pounds 40m on the sale of its 3.66 per cent holding in British Sky Broadcasting, the satellite TV venture.

The sale, to three other BSkyB shareholders - Granada, Pearson and French group Chargeurs - is expected to be concluded this week. The three will pay around pounds 45m for all Reed's interests in the venture, which cost it pounds 84.7m.

Peter Davis, chief executive of Reed, has pressed the other shareholders for a deal in which all Reed's obligations to BSkyB are taken off its hands. 'We want to get out cleanly,' said Mr Davis. 'I think we will find a deal that is fair to both sides.'

Lazards, which is acting for the other three investors, has argued that Reed must take a substantial discount to sell quickly.

Reed has accepted this, and a senior source said the price would be in the region of pounds 45m.

According to a report published last week by stockbroker James Capel, BSkyB is currently worth about pounds 2.1bn. This would value Reed's holding, which cost it pounds 54m, at pounds 77m.

Reed also has pounds 30.7m worth of loan stock and is owed nearly pounds 15m as a fee for guaranteeing pounds 130m of BSkyB's bank loans.

The guarantees were given by Reed, Granada, Pearson and Chargeurs in 1990 - when banks would not lend to BSkyB without guarantees - and the shareholders negotiated a fee of 4.3 per cent a year. The loans run out at the end of this month and are being renewed with guarantees from all but Reed. However, the fees will drop to 0.3 per cent a year.

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