Time Inc. Hires Help To Weigh Overtures -- WSJ
09 December 2016 - 7:02PM
Dow Jones News
By Jeffrey A. Trachtenberg and Dana Mattioli
Time Inc. hired banks to help field takeover or partnership
interest after the country's largest magazine publisher received
overtures from a group of media investors including Edgar Bronfman
Jr.
The company tapped Morgan Stanley and Bank of America Corp.,
according to people familiar with the matter. It is far from
guaranteed there will be a sale of the company or any other
deal.
Time Inc., owner of well-known titles including Time and People,
has been grappling with declining print advertising and newsstand
revenue, along with other legacy print publishers. Last month, the
company reported that revenue fell 3% year-over-year to $750
million in the third quarter. The publisher reduced its full-year
revenue guidance to flat-to-1%-lower compared with an earlier
forecast of an increase of up to 1.5%. It has been racing to
develop new lines of digital business to offset steady
print-advertising declines.
Time Inc. shares have ground lower since it became an
independent public company in 2014. In its first day of trading on
the New York Stock Exchange in June of that year, Time Inc. shares
opened at $23.09. They have since fallen as the company and the
industry's prospects have diminished, and traded at less than $14
before the Bronfman group's interest surfaced last month. The stock
has since jumped, and it surged nearly 8% Thursday to $17.75 after
The Wall Street Journal reported on the advisers being hired.
The company's woes helped draw investor Jana Partners LLC, which
took a roughly 5% stake. Time Inc. in September named Rich Battista
chief executive, succeeding Joe Ripp, who remains executive
chairman.
Mr. Bronfman is the former CEO of Warner Music Group and now has
his own private-equity firm. His partners in the Time Inc. effort
include media executive Ynon Kreiz and billionaire Len Blavatnik.
They bid at least $18 a share for the company, which Time Inc.
rebuffed, people familiar with the matter have said.
The group remains interested, a person familiar with the matter
said Thursday. It is working with Alan Mnuchin of AGM Partners, the
brother of incoming Treasury Secretary Steven Mnuchin and a
longtime adviser to Mr. Bronfman.
It isn't clear who else might be interested in Time Inc. One
potential bidder, according to bankers and investors, is Meredith
Corp., a Des Moines-based company that owns 17 TV stations and
magazine titles including Shape, Family Circle and Better Homes and
Gardens.
Time Inc. nearly did a deal with Meredith in 2013, when Jeff
Bewkes, then-CEO of the company's parent, tried to sell it most of
its magazines -- excluding Fortune, Time and Sports Illustrated.
After those talks unraveled, then-parent Time Warner Inc. spun off
Time Inc. as an independent, publicly traded company.
In an interview earlier this week, Steve Lacy, Meredith's CEO,
said: "I want to be clear: There have been absolutely no meaningful
conversations between our two companies since 2013."
Mr. Lacy, however, expressed respect for Time Inc.'s portfolio
and wouldn't say whether Meredith intends to approach Time Inc.
about a possible bid in the near future. He added: "They aren't the
only party in the marketplace that would be of interest to us."
Meredith has enjoyed a strong year despite the collapse in
January of its pending merger with Media General Inc., which was
upended by Nexstar Broadcasting Group Inc. Meredith, however,
walked away with a $60 million breakup fee. On July 21, investors
drove up Meredith shares to an 8 1/2 -year high.
Other magazine owners are expected to at least take a look at
part or all of Time Inc.
Dana Cimilluca contributed to this article
Write to Jeffrey A. Trachtenberg at jeffrey.trachtenberg@wsj.com
and Dana Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
December 09, 2016 02:47 ET (07:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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