CBS Inc. told employes yesterday that it plans to sell three of its book publishing companies, including the general book publishing division of Holt, Rinehart and Winston.
CBS informed employes that it put Holt, Rinehart and Winston General Book, Praeger and Winston-Seaberry up for sale because they do not fit with the company's desire to focus on portions of the educational and professional book publishing market. The three divisions on the block employ about 127 people and contribute less than 10 percent of CBS' educational and professional publishing revenues.
Praeger, acquired by CBS in 1976, publishes scholarly monographs for the academic market. Winston-Seaberry, acquired in 1984, publishes religious educational materials.
CBS entered the publishing business in 1967 when it acquired Holt, Rinehart and Winston, publisher of G.B. Trudeau's Doonesbury Classics and Leo Buscaglia's "Living, Loving & Learning." The company told employes yesterday that it plans to keep Holt's textbook and other educational publishing operations.
"That is pretty much consistent with their strategy," said John Reidy, an analyst with Drexel Burnham Lambert Inc. "They are leaving core educational and professional publishing businesses intact, while focusing on key predictable growth areas. It makes sense for them to prune out assets that don't exactly fit with their long-term growth goals."
On July 3, CBS announced plans to sell assets sufficient to generate about $300 million in after-tax proceeds, although the company did not specify what assets would be sold. The asset sales are part of a program that included a $954.8 million stock buyback plan that was designed to block Atlanta media executive Ted Turner's hostile takeover bid and increase returns to CBS shareholders.
The stock buyback significantly increased the level of debt on CBS' books, and the company said it would use proceeds from asset sales to reduce borrowings. One analyst said yesterday he was surprised to learn that publishing assets were the first businesses put on the block, since Wall Street believes CBS is most interested in getting out of the toy business.
"While the assets to be sold have not yet been selected," CBS said last month, "the company will endeavor to select assets which it does not deem essential to the operation of its core businesses. The company anticipates that such asset sales would be completed by July 1986. . . . The company also intends to begin a program to reduce corporate and divisional overhead expenses with the goal of achieving a reduction of at least $20 million per annum from previously projected amounts by the end of 1987."
CBS Inc. has three major divisions: publishing, broadcasting and records. The publishing group, which had revenue of $619.2 million and operating profit of $59 million last year, includes CBS Magazines and CBS Educational and Professional Publishing. CBS Magazines was expanded dramatically earlier this year with the $362.5 million purchase of the Ziff-Davis consumer magazine group.
Well-known magazines owned by CBS include Car and Driver, Field & Stream and Modern Bride. Earlier this year CBS sold Family Weekly, a Sunday newspaper magazine that competed with Parade Magazine, to Rosslyn-based Gannett Co. Inc. The company also sold World Tennis magazine.