NEW YORK — AOL Time Warner Books will be staying on the shelf, after an auction to sell the division failed to generate a price “that reflected the value of the asset,” according to a company spokesman.
AOL TW said it has decided to keep its consumer book group, which includes Warner Books and Little Brown, in the corporate family. Company says it’s satisfied with the unit’s cash flow position and profitability and described it has “a solid asset.”
CEO Richard Parsons has insisted that AOL Time Warner is not in a fire sale mode and over the last six weeks has sufficiently fortified its financial situation — thanks in part to the $1.2 billion sale of its stake in Comedy Central and an unexpected $750 million payout from Microsoft — to meet its debt reduction targets.
AOL TW was thought to be seeking $350 million-$400 million for the group. U.K. group Perseus had been in the running for the unit but reportedly was unable to raise the funding for an acquisition of that scale. Lead contender Random House may not have been willing to pay the premium AOL TW was seeking.
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Sources at Bertelsmann had suggested that the powers within the German media conglom refused to back Random House chief Peter Olson’s desire to buy AOL Time Warner Books, particularly at a time when the New York-based book group is undergoing its own restructuring to cut costs amid sluggish book sales.