MCGRAW-HILL LOOKING TO DEAL;DIVESTITURE OF TV STATIONS COULD HELP FOOT BILL FOR SOME ACQUISITIONS

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[Scottsdale, Ariz.] McGraw-Hill Cos., the Business Week publisher that has sat on the dock during the past year's media merger and acquisition frenzy, appears ready to dive in with a major readjustment of its portfolio.

Indications of movement came last week when President-Chief Operating Officer Harold W. "Terry" McGraw III was a surprise last-minute cancellation from the American Business Press meeting, where he was scheduled to be a panelist.

WORKING ON ACQUISITIONS

Reached last Monday in New York, Mr. McGraw said his absence was due to "a couple of acquisitions that we're working on pretty hard."

He also said there would be a "fair bit of divestitures," and that "it should all be done in the next few months."

He declined to cite specifics, adding only, "We're focusing on the overall business portfolio and looking at where the new revenue growth is coming from."

Immediate attention for divestitures focused on the four TV stations the company purchased from Time Inc. nearly 30 years ago. McGraw-Hill in the past has said the stations would not be sold, but today some experts say the price tag on the TV operations alone could be upwards of $600 million.

If the stations are part of two or three spinoffs, Wall Street observers say, the divestitures could easily approach $1 billion-giving McGraw-Hill a fairly substantial war chest to finance acquisitions.

The other potential area for pruning would be in the Publication Services Group, though the company has not made any major magazine divestitures since the late 1980s.

THE TIME IS RIGHT

"Certainly, if they ever wanted to sell television, this is as good a time as it is going to get," said Oppenheimer & Co. media analyst Edward Atorino. "But unless they reinvested the money very quickly, they would get killed on taxes. That's why they never wanted to sell in the past."

The stations-three VHF channels in Denver, Indianapolis and San Diego and a UHF operation in Bakersfield, Calif., all ABC affiliates-have seen their value skyrocket thanks to the relaxation of media cross-ownership rules.

Further fueling the speculation is last month's departure of Edward Reilly, the broadcast operations president who jumped to Big Flower Press, an acquisition-minded printing concern that recently went public.

PRAISE FOR BLOOMBERG

Delivering the Scottsdale address in Mr. McGraw's absence, Exec VP-Publishing Norbert Schumacher spoke highly of Bloomberg LP, a financial news service that has branched into TV, radio and publishing.

That praise of a rival media company raised eyebrows and caused some to wonder if McGraw-Hill is pursuing the company as an acquisition-perhaps buying out Merrill Lynch & Co.'s share of Bloomberg.

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