Scholastic Bows Out of eToys Bid

Scholastic Corp. withdrew its $8 million bid for the assets of now-defunct
eToys.com.

The announcement was made Monday evening after the closing bell.
Throughout the day, the New York City-based children’s publisher saw its
shares fall by about 13 percent, dropping from an
opening price of $40 to a $35.13 close.

The $8 million bid for eToys assets was contingent on winning a separate
auction for all eToys shares. A Scholastic spokesperson told
internetnews.com that the ultimate plan for the purchase was to revise the
company’s Web site and create ecommerce offerings that include both
educational and non-educational product offerings.

A reorganized Web site is still under development but the eToys’ assets
are not crucial to the plan, according to a statement released by
Scholastic.

The proposed acquisition did not meet Scholastic’s standards for reducing
costs or accelerating Web initiatives, the statement said.

Calls to the book publisher for further comment were not returned as of press
time.