Reed Elsevier bucked the overall downward trend of the FTSE last Friday, showing renewed market interest in it on rumours of a takeover. Though, strangely, the rumours that swept the floor, according to Reuters, were that it would be taken over by Dutch information services and publishing giant Wolters Kluwer.
Not surprisingly, some analysts were keen to pour cold water on the speculation, pointing to EU regulations, which had scuppered a previous planned merger in 1998.
The two companies have divisions spanning all the major information markets - education, legal, tax and financial, health - and you could imagine that such a merger would be extremely appealing to them in terms of consolidating costs bases. It wouldn't necessarily benefit the buyers.
However, both companies may be a bit worried by the war chest that Thomson Corporation is planning to create by selling off its second largest division this year, and leaving it with enough money for a big acquisition - possibly even Germany's Springer.
The Anglo-Dutch publisher is still a major powerhouse in the market – last November it said it was still on course to post revenues of $5.44bn in 2006, with 5% growth in its business before acquisitions and currency fluctuations were taken into account.
But 2007 looks like being a year of significant consolidation. And investors in stock markets don't get bullish for no reason at all. Maybe the view is that because the takeover seems to be slightly inverted (the much smaller Wolters Kluwer taking over the larger Reed Elsevier by way of equity investment backing) that there might be a way to be found around the regulators.
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