How Reader's Digest Bungled a Buyout

Reader's Digest(RDA Quote) is providing Wall Street with an abridged version of how not to do a corporate takeover.

But these useful tips won't be found in a recent copy of the publishing company's pocket-sized magazine. Rather, they are disclosed in a recent regulatory filing chronicling Ripplewood Holding's proposed $1.6 billion buyout of Reader's Digest.

The Pleasantville, N.Y. publisher reveals the private-equity firm twice offered to pay $18.50 a share for the company, almost 9% more than the $17 a share takeover price that Readers Digest's board ultimately agreed to in November. ...