A failed bid to acquire the large Simon & Schuster book-publishing operation from Paramount Global could still generate a return: Under terms of the agreement, Penguin Random House has to pay Paramount $200 million.
The two companies agreed to a $2.2 billion sale of Simon & Schuster in November of 2020, but a U.S. District Court ruling issued at the end of October scuttled the deal, which was blocked by a 2021 suit by the U.S. Department of Justice. Now the two sides are preparing to move in different directions.
In a filing with the U.S. Securities and Exchange Commission filed Monday, Paramount said it terminated the agreement, and noted that Penguin Random House is “obligated to pay a $200 million termination fee to Paramount.” And it indicated it still wants to dispose of Simon & Schuster, home to authors such as Jennifer Weiner and Stephen King.
“Simon & Schuster remains a non-core asset to Paramount, as was determined in early 2020 when Paramount conducted a strategic review of its assets,” the company said in the filing. “Simon & Schuster is a highly valuable business with a recent record of strong performance; however, it is not video-based and therefore does not fit strategically within Paramount’s broader portfolio.”
The deal would have created a new behemoth in a shrinking industry, where book publishing is largely dominated by Bertelsmann’s Penguin Random House, Paramount’s Simon & Schuster, News Corp.’s HarperCollins, Holzbrink Publishing’s Macmillan and Hachette Book Group.
“Penguin Random House remains convinced that it is the best home for Simon & Schuster’s employees and authors, and together with Bertelsmann, we did everything possible to complete the acquisition. We believe the judge’s ruling is wrong and planned to appeal the decision, confident we could make a compelling and persuasive argument to reverse the lower court ruling on appeal,” the company said. “However, we have to accept Paramount’s decision not to move forward. We want to thank our Penguin Random House employees and the teams at Simon & Schuster for their support. We wish them the very best in the future, and look forward to continuing to make a positive impact on society through the books we are honored to publish for readers everywhere.”
From Variety US