Time Inc. Hires Banks to Help Field Takeover or Partnership Interest
December 08 2016 - 4:40PM
Dow Jones News
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 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 diminish, and traded at less than $14 before
the Bronfman group's interest surfaced last month. The stock has
since jumped and traded at $16.60 midday Thursday.
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 $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 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 8½ -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 08, 2016 16:25 ET (21:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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