When the little minnow that was Riverdeep swallowed up Harcourt Education, Harcourt's owner was forced to take a stake in the whale-consuming feast. Now Reed Elsevier has loudly declared that their super-sized portion has shrunk down to a mere mouthful.
Reed Elsevier took $300 million and invested it in HMH-Riverdeep-EMPG-et. al. because it was the only way to unload Harcourt Education. That same $300 million has shrivelled up and the stake is currently valued at 127 million euros.
Well, that's up to them entirely says EMPG. The shareholders can peg their investment where they like. And what's the fuss, anyway? Reed Elsevier reported an increase in sales so they're not in any financial pain, are they? Who are they to cry poor when they're turning a profit? Barry O'Callaghan's baby isn't as ugly as all that.
EMPG isn't the prettiest little fish in the pond, however. Standard & Poor's cut the firm's rating from B- to CCC--. That's about as close to a failing grade as one can get without acquiring a "junk bond" appellation.
They're just waiting for the money to drift out of Washington, D.C. EMPG is counting on the big stimulus package to shore up the heavily leveraged firm. More federal dollars for education means more federal dollars for educational publishing materials, or the whale-swallowing minnow is sunk.
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