SOURCE: VANITY FAIR
“Meredith’s expectations are higher than they’ll achieve”: Time’s New Owner Says No Thanks to David Pecker’s $300 Million Offer
Meredith is entertaining offers for Time Inc.’s old crown jewels, to be sold together or separately—but Donald Trump’s favorite publisher is not in the running.
On Tuesday, when celebrities, media executives, and influencers descend on Frederick P. Rose Hall at the Time Warner Center for this year’s Time 100, it will be the annual gala’s first go-round under the auspices of Meredith Corporation. It will also, in all likelihood, be the gala’s last go-round under the auspices of Meredith Corporation.
The Iowa-based magazine publisher acquired Time Inc.’s roster of publications in January. Now, Meredith is selling the ones that look out of place on its bench of soft lifestyle brands. In addition to Time, that includes Fortune, Money, and Sports Illustrated. Meredith is putting the finishing touches on the sale prospectuses that will go out to interested buyers, and the bankers handling the auction have been meeting regularly with senior staff at those publications, getting everything in shape, people familiar with the process told me. Citigroup is shopping Time, Fortune, and Money; Houlihan Lokey is doing S.I. It will be several weeks before the company learns which of the dozen or so parties that have come out of the woodwork thus far are serious suitors, and which are just gawking.
Actually, there has already been at least one serious suitor. David Pecker’s American Media Inc. recently made an offer of more than $300 million for the four titles, a person with knowledge of the matter told me, but the offer was rejected. (Pecker was known to have his eye on Time Inc. even pre-Meredith.) People—which was Time Inc.’s cash cow—and Entertainment Weekly both would have been a boon to A.M.I.’s celebrity empire (Us Weekly, OK!, Star), but Meredith is keen on keeping them. (A.M.I. didn’t have a comment.)
A.M.I. floated its offer, according to my source, before Meredith C.E.O. Tom Harty explicitly said during internal staff meetings on March 21 that the company would not sell to Pecker, allaying concerns among employees who were fearful of such an outcome. Pecker is a longtime Donald Trump ally with a reputation for boosting his pal via The National Enquirer, which A.M.I. also owns. Pecker and the Enquirer have been feeling the heat lately, between their entanglement in the federal investigation into Trump lawyer Michael Cohen and negative headlines about so-called “catch-and-kill” incidents, in which the Enquirer is alleged to have paid for damaging Trump stories only to bury them. (The Enquirer has denied this.)
A few weeks ago, the New York Post reported that Pecker’s pursuit of Time and other titles included an attempt to raise money from Saudi Arabia’s Public Investment Fund, which instead gave Jay Penske’s Penske Media Corporation $200 million to go shopping with, dashing A.M.I.’s chances of going to bat at Meredith. When I asked an A.M.I. spokesman about this characterization, and whether A.M.I. had been pursuing Saudi cash for acquisitions, he said, “Absolutely not.” (A.M.I. did, however, create a favorable one-off magazine about Saudi Arabia to coincide with Crown Prince Mohammed bin Salman’s recent visit to the U.S., a publication that A.M.I. likened to doing fluffy special issues about, say, the British royals or the Kennedys or the Olympics—topics that are, one might argue, considerably more newsstand-friendly.)
Meredith and its bankers have been holding the names of other potential buyers close to the vest. But during Harty’s March 21 staff meetings, he described the interest as primarily coming from wealthy individuals with non-media backgrounds, as opposed to private-equity players or traditional media companies. The Houlihan Lokey team (no comment) has relayed to S.I. staff that it feels good about the inbound interest. The Citigroup team (likewise no comment) has privately said it would make sense for Time, Fortune, and Money to be sold as a package, but others in the deal world are skeptical.
“I don’t think that’s gonna happen,” said Reed Phillips, a banker at Oaklins DeSilva+Phillips, who has consulted with people interested in the Time Inc. titles but isn’t currently working with anyone on a bid. “No one buyer probably wants all three, but there are probably a lot who want just one of those properties.” Phillips said the titles will each find a home, but not for as much money as Meredith would like. (A Meredith spokesman had no comment for this story.) “I think the purchase prices are gonna be lower than they anticipated across the board,” said Phillips. “Meredith’s expectations are higher than they’ll achieve.”