Wolters CEO not in market for major new deal

By Gavin Haycock and Harro ten Wolde

LONDON/AMSTERDAM (Reuters) - The head of Dutch publishing group Wolters Kluwer, cited by analysts recently as a potential merger play for Reed Elsevier, said her company was not in the market for a deal to change its strategic direction.

"Our goal is not to do anything tranformational in a sense that we will move into a brand new area of the market," Wolters WLSNC.AS Chief Executive Nancy McKinstry told Reuters in an interview after the group's third-quarter results on Wednesday.

McKinstry used the same line in January when she gave a number of interviews making clear she was not minded to embark on any radical deals.

At the time rumors of a potential tie-up with Anglo-Dutch publisher Reed Elsevier (REL.L) were boosting shares in Reed.

The speculation came back and lifted Reed's shares late last week, prompting one unnamed analyst to say that in the wake of brewers Carlsberg (CARLb.CO) and Heineken (HEIN.AS) launching a 6.8 billion pound ($14.2 billion) bid for Britain's Scottish & Newcastle SCTN.L a lot of major speculative deals that have been talked about for years were attracting renewed interest.

McKinstry said she did not want to comment on market talk about a Reed-Wolters tie-up.

"We are very focused on executing our strategy, to realize profitable growth," she said.

"Our goal as the management team is to execute our plan, we will close the value gap between us and some of our peers and drive shareholders value and maintain our independence in that process," she added.

Dresdner Kleinwort said on Friday in a research note about a potential merger that there was industrial logic and significant cost savings to be achieved from such a deal. The case for and against such a deal was evenly balanced, the broker added.

A back-of-the-envelope calculation suggests around 200 million in technology related, license fee savings and staff cuts that would equate to 4 percent of the combined cost base.

"Given market estimates of earnings enhancement post such a deal are in excess of 15 percent, it would allow Reed CEO Crispin Davis an opportunity to exit on a high note -- his contract is due to expire in 2009 -- leaving a currently well-liked successor in Nancy McKinstry to deal with the integration headaches," Dresdner Kleinwort said.

Speculation about a possible deal between Reed and Wolters has been occurred in the market almost every two to three years since 1998. The two companies dropped a planned merger in that year after EU regulators said a tie-up would hurt competition.