Barry O'Callaghan, the Irish entrepreneur, is considering an audacious £2bn bid for Reed Elsevier's educational publishing business, months after his educational software group completed a $5bn (£2.6bn) reverse takeover of Houghton Mifflin, the US school textbook publisher.

Sir Crispin Davis, Reed's chief executive, yesterday announced it would sell Harcourt Education, after more than a year of falling revenues and profits stemming from errors and contract losses in its exam testing business.