RPT-UPDATE 2-Hachette Book Group drops plan to buy Perseus

Fri Aug 8, 2014 1:31pm EDT

(Repeats with no changes to text)

By Andrew Callus and Supantha Mukherjee

Aug 8 (Reuters) - U.S. publisher Hachette Book Group, owned by France's Lagardere SCA, has dropped its plan to buy unlisted Perseus Books Group, the companies confirmed on Friday.

Hachette said in June it would keep Perseus's books business but sell its client services business to book distributor Ingram Content Group.

"Despite great effort from all three parties, they could not reach agreement on all of the issues necessary to close the transaction," a Hachette spokeswoman told Reuters.

Ingram spokesman Keel Hunt also confirmed the news.

The financial details of the deal were not specified at the time, but according to a report in Publishers Weekly the deal was doomed by complications on Ingram's side.

Had the deal succeeded it would have given Hachette - the fourth-largest U.S. publisher - leverage in a months-long dispute with Amazon over the pricing of e-books.

Amazon has said its push for lower prices was good for authors, publishers and booksellers.

Upset over e-book prices, the online retailer has delayed deliveries, cut discounts, and even removed an option to pre-order Hachette titles such as "The Silkworm", Harry Potter author J.K. Rowling's second crime novel, written under the pseudonym Robert Galbraith.

About 900 writers have signed a petition to protest Amazon's campaign of discouraging customers from buying books published by Hachette. (bit.ly/V3EOL3)

"As writers - most of us not published by Hachette - we feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want," author Douglas Preston wrote in an open letter to readers in July.

Some Amazon customers have also gone public about their decision to buy books elsewhere. Advocates for authors and publishers have used words like "bullying" and "thuggish" and called for government intervention.

Amazon claims that pricing an e-book at $14.99 or $19.99 is too expensive and unjustifiable in most cases and has argued that e-books priced at $9.99 sold more.

Authors and other publishing insiders have accused Amazon of wielding its power as a major retailer to gain an unfair advantage during contract talks by demanding that publishers cut prices and pay higher fees.

Perseus, owned by private-equity firm Perseus LLC, brings out about 700 titles per year and has a backlist of more than 6,000 books.

Hachette had said it would make Perseus's publishing business a new division comprising of nine imprints, including Avalon Books, Basic Books, Da Capo Press, PublicAffairs and Running Press.

Ingram, a unit of Ingram Industries, would have used Perseus's client services division to form a distributor with more than 400 clients ranging from DreamWorks Press to Harvard Business Review Press. (Reporting by Andrew Callus in Paris and Supantha Mukherjee in Bangalore; Additional reporting by Soham Chatterjee in Bangalore; Editing by Joyjeet Das and Saumyadeb Chakrabarty)