KKR in talks to buy publisher Simon & Schuster for more than $1.6bn

KKR is in advanced talks to buy US book publisher Simon & Schuster from Paramount for more than $1.6bn, said people familiar with the matter, which would settle the fate of the storied company after years of uncertainty.

US regulators last year blocked a proposed merger of Penguin Random House and Simon & Schuster that would have created a mega-publisher in the books industry.

Paramount, which owns assets including the eponymous movie studio and television channels in addition to Simon & Schuster, has been shopping the publisher again as it looks to focus on the streaming video business.

Paramount aims to strike a deal in the coming weeks, said people familiar with the matter. Other bidders include Rupert Murdoch’s HarperCollins and the investor Richard Hurowitz, who is backed by Abu Dhabi’s sovereign wealth fund.

A price of $1.6bn would be lower than the $2.2bn Penguin Random House had agreed back in 2020. After the US justice department blocked that acquisition, Paramount is taking regulatory risk into account in addition to other factors such as price, said people familiar with the process. PRH paid Paramount $200mn in termination fees for the collapsed deal.

Last month KKR sold its stake in audiobook publisher RBmedia to private equity firm HIG Capital, a deal led by Richard Sarnoff, the chair of its media investment practice. Sarnoff, who was previously an executive at Random House, has been involved in KKR’s effort to buy Simon & Schuster, alongside partner Ted Oberwager.

Were KKR to win the bid, it would grant stock awards to all of the publisher’s employees, as it did for RBmedia, said a person familiar with the matter.

Simon & Schuster, home to authors such as Edith Wharton and F Scott Fitzgerald, is one of the top five publishers in the US, a prized asset in a sector that has shown resilience to the disruption from Amazon and the pandemic.

Last year, Simon & Schuster’s operating income climbed 16 per cent to $248mn as revenues jumped 10 per cent to more than $1.1bn. Chief executive Jonathan Karp described the year as “extraordinary”.

The Wall Street Journal first reported that KKR was in advanced talks to buy Simon & Schuster.

Paramount and KKR declined to comment.

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