Door not closed on HarperCollins acquisition of S&S, Murray says

The “door isn’t closed” on a HarperCollins acquisition of Simon & Schuster (S&S) according to HarperCollins president and c.e.o. Brian Murray. 

Murray made the comments in an analysts call for the most recent HarperCollins financial results, which showed an 11% quarterly fall in revenue. Responding to a question of whether Judge Pan’s ruling blocking Penguin Random House’s (PRH) $2.2bn acquisition of S&S on antitrust grounds would impede a new deal with HarperCollins or other large acquisitions, Publishers Lunch reported Murray as saying: “I think of it as, the door isn’t closed, to either HarperCollins or Hachette or another big publisher. I think it definitely closed a little; it’s not as wide open as it was before. There’s a line at the end of the decision that it’s likely another publisher comes to buy it.” 

In Judge Pan’s trial opinion, published on 7th November, she said: “Other potential buyers from the publishing industry have shown interest in acquiring S&S, and it is just as likely that another publishing company will prevail in a future sale”. 

Murray said: “I think there’s a question whether the Department of Justice (DoJ) would want to bring a case against a second publisher.”

He added that while “the DoJ’s case was very solid given the math...the math would be very different for a HarperCollins or Hachette deal”. 

Robert Thomson, c.e.o. at News Corp, parent company of HarperCollins, told analysts: “Clearly, there is much more work ahead for the lawyers at both companies. The legal documents must already run into many volumes themselves. But it is appropriate that the judge rule that the proposed merger would create a book behemoth, literally Leviathan, a titan of tomes that will have disproportionate weight in the industry.” 

PRH and its owner Bertelsmann, which must pay a $200m cancellation fee if the deal falls through, says it will appeal against the decision, arguing the merger would be “good for competition”. 

Bertelsmann c.e.o. Thomas Rabe said last week he believed the court decision had been based on “incorrect assumptions”, and will be filing a motion with the Court of Appeals.  

Murray gave evidence for the government during the trial over the acquisition, saying he was “shocked” by the size of PRH’s $2.2bn offer and News Corp’s own bid for S&S was “not close” to that figure.