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Scholastic rejects eToys
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March 26, 2001: 6:51 p.m. ET
Children's publisher changes its mind about $8 million bid for eToys' assets
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NEW YORK (CNNfn) - Scholastic doesn't want eToys after all.
After a review of its bid for the online toy retailer for about $8 million, children's book publisher Scholastic Corp. said late Monday that the savings just didn't add up for the company, and it would not make a bid for any of eToys' assets.
Scholastic said earlier it conditionally won an auction for the inventory of eToys at 30 cents on the dollar as part of the auction process in eToys' bankruptcy proceedings.
The bid was conditional on Scholastic also winning an auction this week for all the shares in the reorganized company.
 The company planned to use the assets "to accelerate and reduce the costs of Scholastic's own Web initiatives." But the company later decided the assets "did not meet Scholastic's threshold."
eToys filed for Chapter 11 bankruptcy protection earlier this month and closed its Web site. The company collapsed under a heavy debt load and a weak holiday selling season.
Scholastic is the New York-based publisher of the hot-selling Harry Potter children's books and other titles.
Separately, Deutsche Banc Alex. Brown said it cut its rating on Scholastic to "buy" from "strong buy." It gave no details.
Shares of Scholastic (SCHL: Research, Estimates) dropped $5.56 to $35.13 during regular trading Monday, and dropped a further 7 cents to $35.06 after hours.
-- from staff and wire reports 
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