Time Inc. representatives could begin sale talks as early as next week with bidders including Meredith Corp. and a consortium led by Edgar Bronfman Jr., Bloomberg reports citing “people familiar with the matter.”
The board, which met this week, would only sell if it sees “significantly higher” offers for the owner of iconic magazines including Time, Fortune, Sports Illustrated, Money, People, and Entertainment Weekly, the business news service says.
Many shareholders believe that Hearst and private equity investors might submit bids.
Time’s stock price rocketed in late November when the New York Post reported that the publisher — which is expanding into digital and video — rejected a $1.78 billion offer, or $18 a share, from Bronfman, billionaire Leonard Blavatnik, and former Maker Studios chief Ynon Kreiz.
Time Inc. Shares Soar On Report It Has Hired Bankers To Weigh Sale
Shares rose again in December when The Wall Street Journal reported that Time had hired Morgan Stanley and Bank of America to look at sale and partnership proposals.
The stock is trading today at about $19 a share, giving it a market value of $1.9 billion. The price stayed relatively flat after the Bloomberg report.
Time has struggled to grow since mid 2014 when Time Warner spun off the operation that company founder Henry Luce built in the 1920s. In September the board tapped Rich Battista to become CEO, succeeding Joe Ripp.
Time’s market value dropped as much as 40% from the spin off to late last year, before the sale talk. With the boost from the deal expectations, it’s down 12.3% since the spin off — a time when the overall market was up 19.7%.
The company likely could sell for $23 a share and Meredith — which publishes Better Homes and Gardens and Parents — probably will “aggressively pursue a deal,” Wells Fargo Securities’ Eric Katz says.
It could benefit from having magazines that are “broader in scope,” he adds. They also could feed into Meredith’s licensing business with products in stores including Walmart, as well as its broadcast TV stations.
Meredith tried to buy Time before Time Warner spun it off, but those negotiations fell apart.
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