'Poky Little' $84M deal
August 16, 2001 Posted: 1143 GMT
LOS ANGELES (Reuters) -- Random House Inc. and Classic Media Inc said they won a bankruptcy court auction for the assets of Golden Books Family Entertainment Inc., publisher of well-known children's books such as "Poky Little Puppy" and "Pat the Bunny."
The joint bid was worth $84.4 million, plus the assumption of most debt. Industry sources estimate Golden Books' debts at up to $50 million.
With a library of more than 500,000 titles and a vast comic book collection, 3,000 movies, television specials and cartoons, Golden Books is seen as a key asset by the two bidding parties.
Early in June, DIC Entertainment, a Burbank, Calif., developer of children's television shows, offered $170 million for Golden Books, including $73 million in cash, $7 million in notes issued by DIC and $90 million in liabilities, including medical benefits.
"Ultimately, the bidding reached a point where it made more sense to bow out," Andy Heyward, DIC chief executive, said Wednesday. DIC said it will walk away with a $4.5-5.0 million break-up fee from the deal.
Random House, a unit of Germany's Bertelsmann AG and the world's largest general interest book publisher, said it acquired all the book publishing properties of Golden Books.
Classic Media, which acquires and manages entertainment properties in a variety of media, bought the assets of Golden Books' entertainment division, which include the movie, TV and home video libraries, and the production, licensing, and merchandising rights for Golden's characters.
Random House spokesman Stuart Applebaum declined to comment on whether the acquisition would result in any job cuts.
The purchase agreement is subject to regulatory approval. Applebaum said Random House expects to close the deal in early fall.
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