This morning, Jim Milliot reports that Perseus has received signed agreements from “more than 10” ex-PGW publishers. Presumably, this is the 70 cents on the dollar reimbursement in exchange for four years of distribution deal that was bandied about like a tainted carrot to the PGW publishers left in the lurch. This does not mean that Perseus has acquired PGW, but Perseus’s goal is to grab 65% of the PGW clients before the February 12 hearing date. Under the deal, the publishers will retain ownership of their inventory, if not their sunny dispositions.

A former Perseus employee has emailed me, observing the following: Perseus is more concerned with the distribution end of the business rather than the publishing end. This reader also suggests that Barnes & Noble, which sometimes excludes particular titles that aren’t distributed by Sterling, is a shadier example of vertical integration than a prospective PGW/Perseus merger. (As an anonymous publisher reported to Holt Uncensored back in 2003, Sterling began to cut orders from 500 or more down to 100 or less for publishers who weren’t “team players.”)

Because B&N has been able to maintain such a business practice along these lines without any apparent antitrust suits (at least none that I am aware of), this may set a Perseus-friendly precedent for any prospective Perseus-PGW merger. Indeed, I suspect it would be quite easy for a lawyer to craft a disingenuous argument suggesting that an antitrust situation would only exist if an entity controlled all three aspects of the book business: publishing, distributing and selling.

This reader goes on to suggest that Perseus has “found the loophole” by focusing its efforts on book distribution. After all, assuming that your accountants haven’t underreported revenue or hidden the cash a la Sorrento Mesa, book distribution makes money.

A large question mark now hovers over a definitive Perseus-PGW coupling. This morning, PW‘s Jim Milliot reports that there were two additional offers in addition to Perseus’s. AMS’s primary lender, Wells Fargo Foothill, however, has permitted “one more opportunity to consummate a going concern sale.” (And has one of the two offers, as Radio Free PGW suggests, come in from the Chas Levy Company?) AMS, meanwhile, has postponed its annual meeting (apparently, “annual” means little to AMS; they haven’t held an “annual” meeting in four years) to February 23, due to shareholder Robert Robotti’s resignation.

The Book Standard‘s Kimberly Maul reports that Robotti has been replaced by Marc E. Ravitz as AMS Director, coming in from Grace & White (who had a 10% stake in AMS in 2006).

McSweeney’s has issued a public statement, noting, “From here on out, the slate will be clean again and you can count on the standard percentage of your book-buying dollars to go to us publishers. What’s that you say? Would it help for you all to buy books now, during this lean time? Well, sure—it would. We and all the others in this situation do best with these direct transactions, and we promise to deliver top-notch books in return.”

Meanwhile, the publishers have until February 7 to file objections to buyout offers — this, as Perseus’s 70 cents on the dollar offer to indie publishers in exchange for four years of distribution lays on the table. It remains uncertain whether the other two buyout offers have instituted a similar form of blackmail distribution bailout, but I’ll be tracking all developments as they come.

More info on the Perseus-PGW offer: “Perseus CEO David Steinberger said that the company’s standard offer will be 70%, and that the only exceptions will be if a publisher’s fourth-quarter sales seem disproportionate to the rest of the year. ‘We have to give ourselves some flexibility,’ he said. He expects that only in rare cases will the offer to a publisher be less than 70 cents. Steinberger said both Perseus and AMS will move forward with the bid for PGW only if publishers comprising 65% of pre-petition claims agree to move their contracts to Perseus.”

• At Galleycat, Sarah has enlisted the help of Scrivener’s Error author C.E. Petit to explain what the possible Perseus deal means. Petit compares the speculative merger quite rightly to the vertical integration once practiced by the movie studios. Back in 1945, the Justice Department cracked down on the Big Eight studios, who not only made the movies but also owned the theatres in which their films were distributed. This, of course, left independent producers in the lurch. Because Paramount and company had a vested interest in keeping their product circulating, it was clear that independent producers who weren’t operating under the Big Eight umbrella were placed on a second-tier. Since Perseus is also a huge publishing outfit, one wonders whether Perseus will do something similar, should a PGW buyout go down. After all, if Perseus is laying down a sizable chunk of change, the company is going to want to protect its investment. It’s quite possible that this means giving the minority of table placement to the indies, if any at all.
• The usually sharp Sara Nelson has a remarkably obtuse editorial about AMS. Nelson is mystified by why everyone is talking about AMS, concluding that the “economy of scale” “may help editors stop worrying about how to get books out, and go back to what they do best: focusing on how to get them in.” Soft Skull publisher Richard Nash responds , observing that Perseus “up until three years ago, knew little about distribution” and observing that “[t]he Perseus catalog is going to be the size of a telephone directory–that is not going to help retailers and it is not going to help publishers.”
• In today’s PW, Jim Milliot reports that Simon & Schuster lost a bid on $5 million in inventory. He also offers a second story, with sparse reactions on the potential Perseus buyout. In the latter article, Black Classics Press head Paul Coates says that the 70 cents on the dollar offer would only work with current PGW staff in place.
• What does Radio Free PGW think of all this? Holograms of PGW employees are the only option.
• The story has finally hit the AP, with Grove/Atlantic publisher Morgan Entrekin opining that the Perseus deal could give indies more leverage, and The Wall Street Journal (the story is behind a paywall).

Publishers Weekly: “The Perseus Books Group made it official this morning, announcing that it had made an offer to acquire “substantially” all of the distribution contracts of PGW, the distribution unit of bankrupt AMS. As previously reported here, Perseus is offering to pay all PGW clients 70% of the money owed to them by PGW, but not paid because of the Chapter 11 filing, in exchange for taking over distribution. In addition, Perseus will pay PGW’s operating costs for a five-month transition period following closing of the agreement. The deal is subject to approval by the bankruptcy court, and AMS will file a motion later this week to get that approval.”