"No deal has been done," Tom Moloney, COO of Emap USA's parent company Emap PLC, told Adage.com, but he added impishly "in the current market that would be a very good price, don't you agree?"
Perhaps, but Emap USA had sought bids for at least $600 million. As the final bids for the troubled unit -- which Emap bought from current Ziff Davis Chairman-CEO Jim Dunning and financial players Willis Stein & Co. in early 1999 for what was unanimously viewed as a lavishly priced $1.5 billion -- rolled in around June 22, an executive familiar with the process said the bids were originally in the $550 million range.
Not yet final
The Journal cautioned the deal was not yet final. Also involved in the Emap endgame were David Pecker's American Media -- which failed late last year in a bid to purchase Times Mirror Magazines, despite teaming up at the last minute with other spurned suitor, The New York Times Co. -- and a Texas Pacific Group bid affiliated with former Primedia CEO William Reilly.
A Primedia spokesman had no comment, as did a spokesman for American Media.
"I hope there is more than one interested party," Mr. Moloney said, although a tangible sense of defeat emanated from one other camp late today. Mr. Moloney had been CEO of Emap USA, which publishes titles like Motor Trend and Teen, before being named COO of the parent company in May.
Primedia has a constellation of niche titles that will fit well with Emap's similar portfolio, especially in the automotive arena. Among Primedia's larger titles are New York and Seventeen.
Profits and revenue down
Emap's experience with Emap USA was a rocky one. In May the company wrote down about $770 million on the unit. For the fiscal year ending March 31, Emap USA's profits fell 25% to $39.7 million, and revenue was off 7%, falling to $360.1 million. Were it not for favorable dollar valuations, the company said, revenue would have been off an additional $28.4 million and profits off another $4.3 million. Also in May, Emap PLC's CEO Kevin Hand was ousted.
Should Primedia prevail, it will be interesting to see what the company does with the troubled Teen, which is the trailing title among the traditional teen-girl magazines and had been up for sale earlier this year.
It will also be interesting to see how Wall Street reacts to the expected news. Primedia's stock has languished under $10 since mid-March, off a 52-week high of $22.75 in the wake of its deal last year for About.com.