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Time Inc will be sold to rival media group Meredith in a deal valued at $2.8bn and backed by the Koch brothers, giving the conservative billionaires a stake in one of America’s best-known publishers.

Meredith said on Sunday it had agreed to acquire Time Inc’s outstanding shares for $18.50 a share in cash. The deal has been approved by both companies’ boards and is expected to close in the first quarter of 2018. The $2.8bn deal value includes assumption of Time Inc’s debt.

Iowa-based Meredith’s bid is backed by $650m in a preferred equity commitment from Koch Equity Development, Charles and David Koch’s private equity arm. The publisher has also secured secured $3.55bn in debt financing from RBC Capital Markets, Credit Suisse, Barclays and Citigroup Global Markets.

The Kochs will not have a seat on Meredith’s board and, the company said, “will have no influence on Meredith’s editorial or managerial operations”.

It is Meredith’s third run at the 94-year-old Time Inc, which publishes Time, People and Sports Illustrated magazines.

Time Inc has been trying to transform itself from a print to a digital media business in the face of successive years of declining revenues but has been shackled with a $1.2bn long-term debt burden.

The company has been making sweeping cost cuts, eliminating 300 jobs, cutting back the circulation and frequency of some of its best-known magazines and attempting to sell its UK magazines division.

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