Time Inc. spinoff could lead to more deals

The spinoff of Time Inc. to create the world's largest publicly-traded magazine publisher may be just the beginning of deals for the owner of People and Sports Illustrated.With analysts estimating an enterprise value of about $3.9 billion—a measure of what it could cost to buy a company—an independent Time Inc. will be bigger than any other publicly held enterprise focused on magazine publishing, according to data compiled by Bloomberg. Following a failed attempt to divest some magazines to Meredith Corp., Time Inc. could actually buy Meredith, which is half its projected size, to consolidate costs, said Wunderlich Securities.Or, Time Inc.'s titles and its more than $3 billion in annual revenue may lure private-equity interest, said Wedbush Inc.Time Inc. "could either be an acquisition target for a larger, traditional publishing company or it could itself be an acquirer," Brett Harriss, an analyst at Gabelli & Co., which owns Time Warner shares, said in an interview. "It's clear that magazine publishing is likely in secular decline. That being said, it doesn't mean it's valueless."The spinoff, planned for this year, will shield Time Warner's cable networks and film studio from the publishing industry's struggles with the transition to the Internet and lower online advertising rates, according to Argus Research Co. Time Warner shares already have risen 7.9% since talks of separating the magazine unit emerged, almost eight months after Rupert Murdoch's News Corp.... Continue reading at 'Crains New York'

[ Crains New York | 2013-03-15 00:00:00 UTC ]
News tagged with: #jeff bewkes #declining revenues #evolving industry #makes sense #strategic alternatives

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