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"I'm back."

With those words, Claeys Bahrenburg confirmed that he and a private investment group led by Willis Stein & Partners had emerged as the surprise winners in the bidding war for Petersen Publishing Co.

The question now: Did they pay too much?

Mr. Bahrenburg, 49, will be the chairman-CEO of the company in what ranks as one of the publishing industry's more astounding comebacks. The move comes only nine months after he was forced to resign the presidency of Hearst Magazines, ending a 15-year career with the company.

Industry executives close to the bidding said the price tag was close to $450 million-a figure some thought was excessive.

"Either he's very smart or I'm very stupid," said Fred Drasner, co-publisher of the New York Daily News, who along with Mort Zuckerman was believed to have submitted an early bid of about $250 million for Petersen. "We'll know in a few years who is right."

Petersen had earnings of just under $21 million last year on revenue of $216 million, according to those familiar with the figures. That means the sale price multiple would be 22 times earnings-very pricey for even quality publishing companies, which traditionally command multiples in the low to mid-teens.

In 1994, the company was said to have earnings of about $31 million and many executives felt that was the figure on which to base bids since last year's extremely high paper prices skewed the earnings sharply lower.

Mr. Bahrenburg brushed aside criticism that he overpaid.

"We paid what we thought was a fair price for a good company. K-III is trying to spread the word we overpaid. We did not."

K-III Communications, viewed by many as an early favorite and known for its willingness to pay premiums for the right deal, was believed to have offered close to $400 million in its losing bid.

Willis Managing Director Avy Stein wouldn't confirm the winning price, but said, "If people think we paid a multiple of more than 20 times earnings, they are wrong."

Other heavyweights in the finals included: American Media, with backing from Boston Ventures and entrepreneur Gerry Ritterman; Weider Publications; and an investment group headed by TVSM Chairman Peter Diamandis.

In sharp contrast to his six years at the helm of Hearst Magazines-where he adapted the conservative, low-key style favored by the Hearst family-Mr. Bahrenburg said he will immediately set out to raise the profile of Petersen through print and TV advertising.

He said he will be looking to hire an agency shortly after he finalizes the deal-expected to take place by the end of September. He also plans to aggressively expand into international publishing, business-to-business, licensing and TV programming.

"I think the company is pretty efficiently run so we won't be doing much cost cutting," he said. "We will be looking to grow revenues and develop the franchises. We plan to use the company as a platform for future acquisitions."

Petersen publishes 32 monthly special interest consumer titles including Guns & Ammo, Hot Rod, Motor Trend, Motorcyclist, Sassy, Sport and 'Teen.

In addition to Mr. Bahrenburg and his Chicago-based investment partner, the buyout group includes James Dunning Jr., chairman of TransWestern Publishing, and Neal Vitale, former VP-general manager of the Entertainment Group at Cahners Publishing. Mr. Vitale becomes president and chief operating officer of Petersen.

Publishing executives expect Willis to ultimately seek an exit strategy either through another sale of Petersen or an initial public offering.

"We're not necessarily sitting here with a specific exit strategy," Mr. Stein said. "Our strategy right now is to grow the business. It is certainly possible that we would do an IPO in the future."

Company founder Robert "Pete" Petersen, will be a minority partner as well and is believed to be keeping about a 10% stake in the new group. Even before last week's sale, Mr. Petersen, 70, was one of the wealthiest men in the U.S., but maintained one of the lowest profiles of any top publishing executive.

He started Petersen shortly after returning from World War II in 1947 with a single title, Hot Rod. He has no heirs following the deaths of his two sons in an airplane crash years ago. As recently as several years ago, he was still growing the company with the acquisition of troubled Sassy from Lang Communications and the launch of Golfing.

Mr. Petersen will take the title of chairman emeritus and he and his wife will be on the board. He gets to keep his penthouse office atop the 20-story office building that he owns in Los Angeles.

Mr. Bahrenburg will split his time between New York and Los Angeles.

At least some Wall Street analysts seemed pleased that K-III-which rarely loses bidding wars-did not land its prey this time.

Merrill Lynch & Co. analysts Lauren Rich Fine and William Bird said in a statement, "Based on our estimates of Petersen's cash flow and savings we had assumed as a result of being a part of [K-III], we believe that investors should be happy that [K-III] was not the winning bidder at the speculated clearing price."

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