At its peak, Martha Stewart’s media empire, built around her carefully curated and fussily decorated lifestyle brand, was worth well over US$1 billion.
However, on Monday, the company agreed to sell itself for a fraction of that.
Martha Stewart Living Omnimedia said that it would sell itself to the Sequential Brands Group, a conglomerate whose brands include Jessica Simpson and the Franklin Mint, for just under US$200 million.
Photo: AFP
It is in some ways a reminder of how far the company has fallen from its heights, when Stewart’s particular vision of a perfectly decorated lifestyle commanded attention and investor dollars.
The company was dealt a blow in 2004 when Stewart — a former stockbroker and model who discovered a lucrative knack for decorating and catering — was convicted of obstructing justice and lying about a well-timed stock sale, spending several months in prison in Alderson, West Virginia.
Despite working under a temporary ban from holding an officer title at a publicly traded company, she eventually reclaimed the title of chairwoman of the company that bears her name.
However, Martha Stewart Living has been battered by the troubles that have afflicted many media companies, as readers shifted to other titles and television shows.
In the autumn of last year, the company struck a deal to license two of its main magazine titles to Meredith Corp, providing content for those publications.
Now, the company itself is to become a part of Sequential Brands, whose business revolves around buying brands and then licensing them out for a fee.
All told, Sequential Brands expects its portfolio to fetch nearly US$3.75 billion in annual sales with the addition of Martha Stewart Living.
“This merger is positioned to further the growth and expansion of the unique Martha home and lifestyle brand,” Stewart, 73, said in a statement. “We now have the opportunity to tap into Sequential’s expertise and resources to expand our merchandising business both domestically and abroad.”
Under the terms of the deal, Sequential Brands will pay US$6.15 a share, using a mix of cash and stock. That price represents a roughly 20 percent premium on Martha Stewart Living’s closing price on Wednesday last week, before the Wall Street Journal reported on the discussions.
However, investors seemed dismayed by the announcement, as Martha Stewart’s stock price fell 12 percent on Monday to US$6.12, below the offer price.
Martha Stewart Living was granted a 30-day “go-shop” period, in which it can solicit higher takeover offers.
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