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Friday, August 19, 2011

The company behind Standard & Poors should not be in educational publishing

From Publishers Lunch

For years investors have disapproved of McGraw-Hill's portfolio, which folds the S&P Credit Ratings Agency, Education, and other unrelated businesses under the same umbrella. Recent share pickups by activist hedge fund Jana Partners in tandem with the Ontario Teachers Pension Fund heightened calls for the company to break up, sell, or spin off some of its divisions - especially the education side, the largest group within the company.

The WSJ first reported, with other outlets following with their own unnamed sources or "people briefed on the matter" that McGraw-Hill retained investment bank Evercore Partners to advise the company on a possible separation of the education division. Evercore's task, part of McGraw-Hill's larger operational review which the company discussed on its most recent earnings calls, was to see if as separation was viable and, if it was, whether the division should be sold, spun off or offered in a share sale. Per the WSJ a sale appears unlikely now for tax reasons, but if the education division became a standalone unit through a spinoff, sale talks may come at a later date.

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