US media company Meredith Corp is nearing a deal backed by conservative billionaire brothers Charles and David Koch to buy Time Inc, publisher of Sports Illustrated and Fortune magazines, for about US$2 billion, people familiar with the matter said on Sunday.
The deal would be a coup for Meredith, which held unsuccessful talks to buy Time earlier this year and in 2013.
It would give news, business and sports brands to the Des Moines, Iowa-based publisher and broadcaster, which owns lifestyle magazines such as Better Homes & Gardens and Family Circle.
Photo: EPA
Analysts have said that bulking up on publishing assets could give Meredith the scale required to spin off its broadcasting arm into a standalone company.
A unit of Koch Industries has been backing Meredith’s bid with US$600 million in financing, sources previously told reporters.
It is not clear how much influence the Koch brothers would have over the company.
The Koch brothers are two of the world’s richest men through their ownership of Koch Industries, a sprawling industrial empire that manufactures such products as Brawny paper towels, Dixie Cups and Lycra.
The Kochs, known for their advocacy of conservative policies and influence on some quarters of the Republican Party, had expressed interest in buying media properties such as the Los Angeles Times and the Chicago Tribune in 2013.
Meredith might announce an agreement to acquire Time as early as this week, the sources said.
The sources, who spoke on condition of anonymity because the matter is confidential, said that the talks could collapse at the last minute without a deal.
Meredith, Time and a representative for Koch Industries did not immediately respond to requests for comment.
Time Warner Inc spun off Time, which also publishes the eponymous current affairs magazine, as a standalone company in June 2014. Since then, New York-based Time has struggled in an industry-wide decline in print media, as circulation shrinks and advertisers shift to digital platforms.
Meredith, which has a capitalization of US$2.7 billion, tried to merge with Richmond, Virginia-based broadcaster Media General in 2015, but Nexstar Media Group Inc ended up acquiring that company for US$4.6 billion.
Time shares ended trading on Friday at US$16.90, giving the company a market capitalization of US$1.7 billion.
Time, led by chief executive Rich Battista, has been undergoing a strategic plan that includes revamping its cost structure and focusing on its digital business.
It has been exploring a sale of several magazines titles, such as Coastal Living, Sunset and Golf and a majority stake in Essence as well as Time Inc UK.
The assets it had earmarked for a potential sale represented about US$488 million in revenue for the year that ended on June 30, the company has said.
In September, it named its former digital editor, Edward Felsenthal, to be the new editor in chief of Time magazine. It has also expanded into streaming video channels, launching Sports Illustrated TV through Amazon earlier this month.
Time earlier this month said that in the third quarter of this year, its total revenue slipped 9.5 percent to US$679 million, missing analysts’ estimates of US$693.5 million, according to Thomson Reuters I/B/E/S.
It marked the sixth straight quarter the company had missed expectations for revenue.
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