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HAS VERONIS LOST ITS EDGE? SOME QUESTION MERGER SPECIALIST'S DUAL ROLE

By Published on .

Through the sizzling 1980s, merger and acquisition specialist Veronis, Suhler & Associates handled some of the hottest publishing deals. Yet when Ziff Communications Co. went on the block two weeks ago, rival New York investment banker Lazard Freres & Co. won its second headline-grabbing selloff in a year.

In 1993, Lazard, led by rising star Steve Rattner, snared Knapp Communications' $170 million divestment, and some have asked whether Veronis is cooling off.

Co-founder John Suhler admitted he was disappointed but not surprised. "We don't like to see any get out of the lair, but we never worked with the Ziff family before and didn't feel it was ours to lose."

As for recent activity, he said: "We've never been busier nor have we ever been in better shape."

Veronis recently signed a deal to lease more space at its swank Park Avenue headquarters.

"I don't think they have lost any of their luster," said Peter Diamandis, the one-time head of Diamandis Communications Inc. He first hired Veronis to help divest several titles after leading a $650 million leveraged buyout of CBS magazines in 1987. "There was a frenzy of activity in the late 1980s, and then for three years, there was almost nothing for anybody."

The company hit its biggest payday in 1988 when Walter Annenberg turned to good friend and Veronis co-founder John Veronis to divest Triangle Publications. The package that included TV Guide, The Daily Racing Form and Seventeen fetched $3 billion from Rupert Murdoch's News Corp.

Mr. Murdoch has since said he probably overpaid by $1 billion.

Veronis collected a $50 million fee, industry executives said.

"That deal put them on the map," said Edward Atorino, a media analyst with Dillon Read & Co.

A few months after helping Diamandis divest titles, Veronis returned with a suitor for the whole company: Paris-based media giant Hachette, which ultimately paid $712 million in mid-1988.

Still when Ziff went on the block, Lazard was the choice of the young Ziff brothers, Robert, Dirk and Daniel.

"I don't think you can read anything into it," said magazine consultant Daniel McNamee. "... As business brokers, they have a reputation as high quality."

Some theorize Veronis' decision several years ago to raise money and take equity positions in media holdings may have hurt the company as a merger and acquisition dealer. One executive said the perception among some was that Veronis was raising money to be an equity player in some media deals while brokering others.

Veronis' VS&A Communications limited partnership recently sold a Stagebill stake to K-III Communications Corp. and just last week said it's selling its part of a Wichita, Kan., CBS TV affiliate to Spartan Radiocasting, Spartanburg, S.C.

But VS&A Communications still has equity ranging from 6% of publicly traded radio stations owned by Broadcasting Partners to 90% of PJS Publishing, Peoria, Ill. Currently, VS&A Communications is raising another $250 million for a second limited partnership investment fund.

Mr. Suhler insisted that playing in both markets hasn't created any problems for the 13-year-old company. "Anything that the investment bank does is not open to the fund, and anything that the fund does is not open to the bank. You have to keep your wires straight."

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