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Friday, September 19, 2008

RBI Losing Value

The Times has reported that second round bids for RBI are way below the target price of £1.2b. This will come as no surprise to readers of this blog. The problem is made worse by the banking crisis which has already scuppered to putative deal for Informa. RBI is heavily exposed to the ad downturn and its high growth totaljobs business is in recruitment - and we know what happens to recruitment.

What will Reed do? We have postulated before that this deal is by no means certain to get done. Will Reed do it at any price? If they don't get it done even at a low valuation is there any real prospect that the business will be worth any more at any time in the forseeable future?

What should RBI do? I have a busy few days ahead, but I plan to offer them some advice (which I am sure they won't take) in a future post. RBI is fixable. It's blody and its painful, but wholly necessary.

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