Penguin Random House is trying to convince Simon & Schuster to join in the fight to complete the planned tie up of the two book publishers.
Penguin said Monday it would appeal the ruling handed down Monday that blocked the $2.2 billion combination of the largest and third-largest book publishers in the U.S., finding it would “substantially lessen competition.” But first, it wants a partner in the battle against the ruling that favored the Department of Justice’s antitrust arguments, The Wall Street Journal reported.
The German media conglomerate Bertelsmann, the parent of Penguin, is in talks with Paramount Global, which owns Simon & Schuster, about what it would take to get Paramount to support an appeal, the Journal said. That might include cash or other payments, the report said, citing unnamed sources familiar with the situation.
The Biden administration, in response to the ruling, said that the decision would protect “vital competition for books and is a victory for authors, readers and the free exchange of ideas.” It argued in court that the merger would reduce competition, decrease the money that authors got from advances and reduce the number and breadth of books that get published by the big houses.
Paramount could simply decide to put Simon & Schuster, the third largest publisher in the U.S., back up for sale, but that’s would likely result in a lower price than Penguin was willing to pay.
“The purchase agreement contains commitments on the part of the purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation,” Paramount said Wednesday in its quarterly filing with the Securities and Exchange Commission, noting that Bertelesmann would have to pay a $200 million termination fee if the acquisition was nixed for regulatory reasons.
“We are discussing next steps with Bertelsmann and Penguin Random House, including seeking an expedited appeal,” Paramount Global said in the filing. The matter was not discussed during Paramount’s quarterly conference call on Wednesday.
The Journal said the companies have until Nov. 21 to reach an agreement on how to proceed.
More details about the decision are expected to be released in the coming days. The judge’s ruling was largely kept under seal because it contains confidential information about the two businesses. Representatives of Penguin and Simon & Schuster were ordered to suggest redactions by Friday, before the rest of the decision is released.
