Simon & Schuster parent Paramount Global allowed the deadline to complete a transaction with Penguin Random House to pass without extension, triggering a $200 million breakup fee, according to the New York Time. Penguin Random House will have to pay the fee because the court ruling blocking the merger last month prevents a deal unless overturned on appeal, and Paramount has decided to take the money and move on instead of granting the extension that would be necessary to take the case to a higher court. The original merger agreement expires today.
The ruling in the federal court case, brought by the U.S. Department of Justice, held that the merger of Penguin Random House, America’s largest book publisher, and Simon & Schuster, another of the Big 5 book houses, would have reduced competition(see “Merger Blocked!").
Paramount plans to continue its efforts to sell Simon & Schuster, with the largest book publishers perhaps out of the picture due to concerns about getting government approval. And the price may have gone up since the PRH deal was struck; Simon & Schuster is on pace for a record-breaking year in 2022, according to the report