Vivendi, Houghton in talks

May 22, 2001
Web posted at: 1317 GMT

LONDON (CNN) -- Vivendi Universal is in talks to acquire U.S. publisher Houghton Mifflin for at least $1.7 billion, a report said Tuesday.

The talks between Vivendi, Europe's biggest media company, and Houghton (HTN: Research, Estimates) are at an early stage and a number of issues need to be resolved, the Wall Street Journal reported.

The acquisition of Houghton would enable the French media giant to expand its publishing business outside Europe. A deal could value the Boston publisher at $60 a share, the paper said. Vivendi denied it had made an offer for Houghton, which declined to comment, the report said.

Houghton Mifflin stock jumped $5 to $58.50 in before-hours trading, according to Reuters.

The talks are the latest in the consolidating educational publishing industry. Houghton is the last major independent publisher in the United States after rival Harcourt General agreed to be sold several months ago to Anglo-Dutch publisher Reed Elsevier and Thomson for $4.5 billion.

Houghton Mifflin is one of the leaders in reading textbooks for elementary and secondary schools and has grown rapidly over the past decade, through acquisitions such as McDougall, Littell & Co.

Vivendi Universal has been reorganized by Chief Executive Jean-Marie Messier along five business lines: music, publishing, television and films, telecoms and Internet. The French company acquired the majority of its publishing business from Havas, a French publisher it bought in 1998.

Vivendi agreed Sunday to buy MP3.com, which boasts the biggest collection of digital music on the Net, for $372 million, uniting the two former foes in a battle for supremacy among online music networks.

Its publishing business employs 21,000 people and had sales of 3.6 billion ($3.2 billion) last year, accounting for 7 percent of Vivendi's 52.5 billion in 2000 sales, the WSJ said.

The education division of Vivendi Universal Publishing had sales of 981 million.

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Vivendi Universal

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