Children's book publisher and distributor Scholastic is the
highest bidder for the inventory of failed Internet retailer eToys, placing
an offer for about $8 million as part of the auction process in the toy
site's bankruptcy proceedings.
The bid of 30 cents on the dollar by the New York-based publishing company
is contingent on an auction for all of eToys' assets taking place this week,
according to a Scholastic spokesperson. Scholastic is one of the world's
largest children's book publishers and is the U.S. publisher of the highly
successful Harry Potter books.
The company is evaluating the purchase of certain assets of eToys in the
bankruptcy auction, particularly technology that would help with its own Web
initiatives. It building a site that will allow parents to buy children's
toys, including Scholastic's own merchandise.
The auction is the latest step in eToys' bankruptcy process, which began
earlier this month when the company, once an Internet high roller, filed for Chapter 11 status.
eToys was one of the best-known e-commerce companies of the late 1990s,
along with Amazon.com and eBay. With backing from venture capital firms
Idealab, Highland Capital Partners and Sequoia Capital Partners, the
toy-selling Web site in May 1999 raised $166 million in an initial public
offering at a price of $20 a share. By October of that year, the stock had
reached a high of $84.25.
But by December 2000, the company was informing Wall Street that its
revenues would fall short of
expectations. At the time, it also began exploring the sale of its business
Scholastic representatives would not comment on whether the company is going
to buy the eToys name and business or rather limit its bid to selected