Reader's Digest lures nearly 100 potential buyers

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The Independent Online

Nearly 100 potential buyers have registered interest in embattled Reader's Digest UK, administrators revealed today.

Moore Stephens - appointed after the 72-year-old British edition of the magazine collapsed into administration last month - said around 30% of approaches were for the whole business, from "potential purchasers with a clear and credible interest".



A deadline of the middle of next week has now been set for indicative offers after information had already been sent out to some 25 possible buyers, according to the administrators.



The April edition of Reader's Digest will be published in the second half of this month and Moore Stephens confirmed work was under way on the May issue.



It added: "Reader's Digest's sales team is marketing advertising space to media agencies for the May, June and July issues.



"Prize draws are continuing, while new direct marketing campaigns are under way and goods are being despatched to customers."



Reader's Digest UK called in administrators on February 17 when its embattled US parent Reader's Digest Association (RDA) said it was no longer able to support it following a crisis in its pension fund.



RDA failed to secure regulatory backing for a funding deal for the UK pension scheme, which has a £125 million shortfall.



The UK Pensions Regulator ruled against RDA's rescue proposals for the fund, which means the scheme, which has 1,600 members, may have to be bailed out by the Pension Protection Fund (PPF) lifeboat.



Reader's Digest UK employs 117 staff and has a circulation of 465,028.



But circulation has been plunging in recent years - down from more than two million in the UK at one stage.



Its US parent also hit hard times after embarking on a highly leveraged 2.8 billion US dollar (£1.9 billion) buyout deal that was backed by private equity.



The US firm filed for bankruptcy protection last August after battling financial difficulties as it laboured under vast interest payments on a 2.2 billion US dollar debt pile (£1.4 billion).



However, the UK title's administration allowed the wider group to plough on with its financial restructuring and RDA confirmed late last month that it had emerged from Chapter 11 protection.



Its other titles across the world - including some 50 editions of the pocket-sized magazine - were not affected by the UK administration.







Phillip Sykes, administrator and head of corporate advisory services at Moore Stephens, said expressions of interest in the title had come from private equity firms and other publishing groups both in the UK and overseas.



He confirmed that nine of the magazine's employees had been made redundant earlier this week.



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