Once again the hills around Heidelberg are alive to the sound of music.  This time, however, we know when the music stops.  As the Springer debt of around £2 billion matures in the next year, owners Cinven and Candover must decide whether to renegotiate with the banks – expensive – or sell and trigger the change of ownership clauses that allow the banks to renegotiate the debt – very expensive , but someone else’s problem.  After all, Cinven and Candover have already cleared their profits in the three re-financings they have already led and will not wish to stick around to see that margin diminished. The FT (24 November 2009) says that the private equity owners will now sell the whole of Springer for less than the €400 million which they had hoped to get for only 49% just a few months ago .

Those private equity players still in the bidding (the FT says they are EQT and Apax) must be very miffed by these proceedings.  And the Springer management team, which has done a splendid job in reviving the margins of a great but wasted asset since it took over in 2003, must also be scratching their heads, and wondering if this is the moment to leave the dance floor and head for the bank.  But if the price is really where the FT says it is, then the door would be open for many more players to join the game of musical chairs.  The private equity players are put off by the debt , the regulator would rule out Elsevier, Wiley-Blackwell are still swallowing and saying never again, but a joint enterprise of Thomson Reuters Science and Healthcare with Springer, floated in New York , would make great sense.  It gives Springer more US exposure and adds a healthcare arm, and the potential of using ISI as an upward step into academic and research service markets.  Which is just where a major primary content publisher should be wanting to go.

Verdict: this is just too obvious ever to take place. When the music stops, you usually find you are on the wrong chair, and sometimes that you do not have a chair at all.


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  1. Tweets that mention David Worlock | Developing digital strategies for the information marketplace | Supporting the migration of information providers and content players into the networked services world of the future. -- Topsy.com on November 24, 2009 13:26

    […] This post was mentioned on Twitter by David Worlock, Simon Thompson. Simon Thompson said: David Worlock reckons a Thomson Reuters acquisition of Springer makes so much sense it'll never happen – http://tiny.cc/2sVSd #dworlock […]

  2. David Worlock | Developing digital strategies for the information marketplace | Supporting the migration of information providers and content players into the networked services world of the future. on December 14, 2009 20:49

    […] the mix when Bertelsmann went out had already been sold to offset debt.  In an earlier blog post (Springer’s Dance to the Music of Time) I looked at the potential of this deal to help consolidate the STM market, and concluded that […]