AOL gives up trying to sell off publishers

AOL Time Warner has abandoned plans to sell its book publishing business after failing to attract a high enough offer.

The company announced its decision to employees of Warner Books and Little, Brown & Co yesterday. The two companies publish authors including Jackie Collins, Ian Rankin and Anita Shreve.

The decision ends a tender process that began at the start of the year. Negotiations took place with a wide range of potential buyers, including WH Smith and publisher Penguin Books.

Bids were believed to have also been made by Random House, the publishing division of German media group Bertelsmann and Houghton Mifflin, bought by a venture capital consortium from Vivendi Universal last year. The price range was understood to be between $300m and $400m.

The sale was intended to demonstrate AOL Time Warner's commitment to reducing its debt. But the disposal was more of a symbolic gesture and would have barely dented its debts, which stood at $26.3bn at the end of the first quarter.

In recent months, the company has raised $750m from a legal settlement with Microsoft, $1.2bn from the sale of 50% in the cable network Comedy Central and $800m from its stake in Hughes Electronics. It is also discussing the sale of its CD manufacturing business.