President-CEO Michael Leeds said the tech media firm made the move in hopes of increasing the value of a company he contends the stock market has undervalued. The decision to put up what amounts to a for sale sign comes after CMP had been contacted in recent months by unspecified companies interested in a deal, Mr. Leeds said.
"We really had been approached by a wide variety of companies, and felt we should explore all of those alternatives rather than a single one, and see what worked out best ultimately for our customers and our own people and our stockholders," Mr. Leeds said.
The stock market has failed to recognize the value of CMP's investments in the Web, trade shows, international media and research, Mr. Leeds said. "This is an opportunity to unlock the value for stockholders," he said.
Mr. Leeds declined to discuss what companies had approached CMP, but stressed that CMP hadn't begun talking with any prospective partner since bringing on Lazard Freres.
There had been persistent rumors this week that Hearst Corp. was buying CMP's electronics titles, such as Electronic Engineering Times, and that International Data Group was negotiating to buy all or part of CMP. Hearst said it doesn't comment on rumors. Regarding IDG's interest, a spokeswoman said, "At this point it's a rumor" and that IDG does not comment on rumors.
Mr. Leeds said CMP's action was not a response to recent weakness in technology advertising, which has depressed CMP's results. CMP today reported net income of $4.7 million on revenues of $124.9 million for the quarter ended Dec. 31, down from the net income of $13.4 million and pro forma net income of $9.3 million on revenues of $132.8 million reported in the same period a year earlier.
CMP, founded by Mr. Leeds' parents in 1971, went public in July 1997 at $22 a share. But its shares have failed to benefit from the boom in technology and Web stocks.
The stock closed Feb. 10 at $19, up 12.6% amid rumors about possible deals. That gave CMP a market capitalization of $438 million. The company is controlled by the founding family.
Mr. Leeds offered no time frame for when a deal may be struck.
"We're really very much at the beginning," he said, "and it's very difficult to guess how long this will take to reach a conclusion--or whether there really will be a transaction."
Copyright February 1999, Crain Communications Inc.