EBSCO Industries, Inc. has now signed definitive agreements to acquire the European operations (France, Spain, and the U.K.) of RoweCom/divine Information Services. According to the announcement, the acquisition is subject to approval by French antitrust authorities, and upon validation of the merger of the two companies, EBSCO will proceed to facilitate payment to the publishers for publications provided to customers of RoweCom Europe. divine indicated that the European operation had accounted for approximately half the total business of RoweCom worldwide.
In regard to the purchase of the non-European operations of RoweCom (which primarily includes the U.S., Canada, and Australia), EBSCO stated: "Significant progress has been made. Due diligence is essentially complete and drafting of final purchase documents has commenced." However, a leading Australian news source (http://www.news.com/au) reports that both Swets Blackwell and DA Information Services are also interested in acquiring the Australian RoweCom business.
Meanwhile, RoweCom's bankruptcy counsel has now posted information and documents at the site http://www.kccllc.net/rowecom. A meeting of creditors is scheduled for Feb. 27, 2003 at 12:00 p.m. at the Office of the United States Trustee in the Thomas P O'Neill Jr Federal Building in Boston. At the meeting, a representative of the debtors (RoweCom/divine Information Services) must appear to be "examined under oath by a representative of the Office of the United States Trustee and by any interested parties that attend the meeting." Creditors are welcome, but not required, to attend the meeting. No deadline has yet been set for filing proof of claims.
Finally, on Feb. 7, the Steering Committee of the ad-hoc RoweCom creditors group issued a second open letter to the publisher and library community that discussed the progress in the proposed transaction with EBSCO and indicated that the committee had that day filed a motion with the Bankruptcy Court that sought to clarify some issues. The letter states: "The motion contemplates that as publishers "grace" 2003 subscription issues, they become creditors of RoweCom in direct proportion to the amount of customers' claims that they have satisfied through such "gracing." The goal of this motion is to ensure maximum cooperation of publishers and continuity of fulfillment for libraries." The committee also indicated that the expectation of the amount of cash available to pay creditors, "at least in the short-term, will be less than $0.50 on the dollar, and possibly significantly less than this amount." For details of the proposal, "which the Steering Committee strongly supports and recommends," read the entire letter. [Click Here for PDF version.]