The LN Sale Rumour Rollercoaster Rolls On

Well, well…what a surprise. The LexisNexis sale rumours have raised raised their ugly head above the parapet again. This time after a report authored by Ian Whittaker of Liberium Capital ( http://www.liberumcapital.com/research/research.aspx) published in early July. Obviously this report that won’t make many employees at LN feel particularly comfortable about how long they’ll have a job at the company

Whitaker’s report suggests that the days of Reed being one large publishing conglomorate are numbered and that one of the first sensible steps for splitting up the company would be to sell off the Lexis Nexis division.

We’re not sure that we actually agree that selling Reed’s legal publishing assets is the smartest move the company could take in the short term or for that matter the long term.

We agree that the figures may not look good at the moment and most likely will get worse as we watch more financial institutions take a dive in the next 12 months especially if the LIBOR scandal gets investigated properly ( and also who know what else traders can dream up in the next 12 months). There are also all those euro issues, China’s economy slow down and so on and so forth. As we all know the list is endless at the moment when it comes to factors in the market that will affect the bottom line.

One thing we can be sure of though is that there is a desire out there in the wider world for more financial regulation not less. Also, the simple fact that we’ll expect to see more insolvencies and more new legislation introduced as we all slowly spiral down that ever growing plughole .

I still remember the words of a Barrister as a young legal bookshop manager in Sydney in the 90’s who told me, “However bad it gets they still need us and then they’ll need us again when it gets better”.

As a legal publisher i’d rather see advantage in the current conditions to help re-invigorate editorial and content creation at Lexis Nexis. New legislation means new content and one thing both the business and legal world will want is that legislation and accompanying content, explanations and analysis delivered down the pipe to them as quickly as possible in the most digestible form so they can advise their clients quickly and efficiently and keep those billable hours up. After investing all that money in delivery and management systems i wouldn’t want not to be able control at least a percentage of the content that is fed through those proprietary systems.

Maybe Lexis management is confident enough of all the software companies and systems that they’ve purchased over the past 5-7 years and installed with law firms worldwide to stay up to date with the competition and remain in a similar price bracket. I on the other hand would be very wary of companies like Google and even Facebook who I imagine will become increasingly active in the corporate business and professional world as shareholders demand more revenue lines than advertising and consumer communication products.

So Lexis Nexis for sale? On numbers alone it might be an attractive thing to do at this point ; but in our book now is the time for renewing human investment in the editorial and content side of the company to give it a boost. Of course it might be too late and Bloomberg & TR West may have already stolen an unasainable lead on LN. But only management at LN / Reed are going to know the answer to that question and will have to make their decisions accordingly.

Here’s a couple of pieces on the subject that might be worth a quick read

Hypothetical: Who Would be the Best Owner of LexisNexis? http://www.geeklawblog.com/search?q=lexis+sale

Lexisnexis For Sale Bloomberg Likely Buyer http://www.bizjournals.com/dayton/blog/2012/01/report-lexisnexis-for-sale-bloomberg.html

Reed Elsevier denies reports that LexisNexis is for sale http://kevin.lexblog.com/2012/01/29/reed-elsevier-denies-reports-that-lexisnexis-is-for-sale/

And on the other side of the fence this report (http://www.minnpost.com/political-agenda/2012/07/thomson-reuters-opposes-minnesotas-proposed-marriage-amendment) about TR in the Minnesota Post is well worth a read.

The company opposes any amendments to the state’s marriage act because in an email to employees said:

We believe the Minnesota Marriage Amendment, if passed, would limit our ability to recruit and retain top talent. For this reason, we do not believe that the Amendment would be good for Thomson Reuters or the business community in the state.

We’d suggest they are actually saying we can’t or won’t fund any more pension plans so we’ll just move our operations to another state. Why changes in the marriage act will limit their “ability to recruit and retain to talent” is beyond me.