BUSINESSWEEK ONLINE : OCTOBER 13, 1997 ISSUE
INSIDE WALL STREET

Wiley May Unload Its Schoolbooks

Usually low-profile, John Wiley & Sons (JWA), a publisher of scientific and technical books, has gotten raves on the Street lately. Its shares, at 29 in April, are now at 38. Is it all the bull market?

No, says David Holzer, managing director for equity trading at Brean Murray in New York. Wiley, he says, is making moves to enhance shareholder value, maybe including a restructuring. Possibly in the cards, too, he adds, is a merger or sale of the family-controlled company. ''John Wiley is a jewel that has been overlooked and is way undervalued,'' he says.

German publishing giant Bertelsmann and K-III Communications, a media company, are rumored to be interested, according to Holzer. Analyst Barbara Chacour of Brean Murray notes that Bertelsmann has said publicly that it's interested in building up its operations in America.

She says Wiley is considering selling its textbook division, which, she figures, has annual sales of $100 million and is worth $200 million to $300 million. This division, she says, ''could be quite profitable in the hands of a publisher with a larger presence in the field.'' A merger or sale has long been urged by some big shareholders, says Jim Awad of New York's Awad & Associates Asset Management. The Lee Bass family of Texas owns about 11% of the stock. In a takeover, the stock, now selling at 1.4 times revenues, would be worth $70 a share--or three times revenues, says Awad. Wiley CEO Charles Ellis could not be reached for comment.


BY GENE G. MARCIAL

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