Grolier Tentatively Agrees To $448 Million Acquisition By French Publisher
NEW YORK (AP) _ French media giant Hachette SA reached an agreement to acquire Grolier inc. for $448.6 million after sweetening its buyout offer for a second time.
The companies announced a definitive merger agreement on Sunday and Grolier’s board scheduled a meeting today to vote on the all-cash buyout proposal, which Hachette raised from its earlier $444 million cash buyout offer.
Under the agreement, a subsidiary of Hachette, France’s biggest publisher and the second-largest in Europe, would pay $24.25 cash per share for the roughly 95 percent of Grolier’s 19.5 million common shares it does not already own.
Grolier stock rose 12 1/2 cents a share to $26.50 Friday on the New York Stock Exchange.
Grolier also granted Hachette the option to acquire about 18.5 percent of its outstanding common stock for $24.25 per share under certain conditions. Such ″lockup options″ commonly are used to discourage competing bidders.
The definitive agreement marks the second time Hachette has sweetened its offer for Grolier, which is based in Danbury, Conn. The French company initially offered $21 a share for Grolier on March 13, later sweetening the bid to $24 a share after Grolier rejected the initial offer as inadequate.
Hachette, which has indicated it chiefly was interested in Grolier’s encyclopedia publishing business, said Friday it had agreed to sell Grolier’s Childcraft Education Corp. to Walt Disney Co. for $52 million if its takeover bid succeeded. Childcraft markets educational toys by direct mail.
Spokesman Amory Hall said that agreement would remain in force under the definitive merger proposal.
Grolier is an international publisher of encyclopedias, reference and educational books, juvenile books and furniture, trade publications and yearbooks. Grolier also owns Mystic Color Labs, a mail-order film processor.
The company has about 7,200 employees.
Grolier posted a profit of $22.1 million on revenue of $424.2 million in its 1987 fiscal year, up from net income of $12.5 million on revenue of $350.6 million the previous year.
The 162-year-old Hachette, which reported sales of more than $3 billion in 1987, has operations in book and magazine publishing and distribution, radio broadcasting, movie and television production and outdoor advertising.
Hachette publishes magazines such as Elle, Paris Match and a new French edition of Fortune, and owns Curtis Circulation Co., which it describes as the second largest national magazine distributor in the United States.