Time Inc. Says No to Sale, Stock Drops Sharply
CEO Rich Battista says the company is "reinvigorated" and "uniquely positioned to succeed in the multi-platform media marketplace."
Time magazine, Entertainment Weekly, People and Fortune owner Time Inc. is ready to go it alone.
"Over the past several months, there has been considerable speculation and news coverage regarding interest by various parties in acquiring Time Inc.," the company acknowledged on Friday. "While Time Inc. had not initiated a process, the board of directors, consistent with its duties, evaluated a number of expressions of interest with the assistance of external advisors."
But it said the board has determined that the company should continue to pursue its own strategic plan. Reports had said that magazine publisher Meredith was a frontrunner to acquire Time Inc. A possible sale had been in Wall Street's focus since it emerged late last year that an investor group led by Edgar Bronfman Jr., which also included Len Blavatnik’s Access Industries, had made a buyout offer. The company's market value at Thursday's closing price had been $1.8 billion, and a deal was expected to fetch around $2 billion.
Time Inc.'s stock was down more than 20 percent at $14.60 in pre-market trading at 8:35 a.m. ET in a sign that investors had been looking for a sale.
"Time Inc. is a reinvigorated company uniquely positioned to succeed in the multi-platform media marketplace with an exceptional set of brands and assets, tremendous scale and significant untapped potential," said Battista. "The company is better positioned to capitalize on this potential with its recent shift from a siloed, legacy publishing structure, to an integrated, enterprise platform structure."
He added: "We are excited to execute on our plan as we have become a leader in digital and remain number one in print ad revenue share. In addition, our transformation has brought a number of potential partners interested in working with us to unlock and accelerate value across our portfolio of brands.”
John Fahey, lead independent director, said: "Time Inc. is one of the world's leading multi-platform media companies, engaging over 170 million U.S. consumers across digital and print every month through a portfolio of premium, iconic brands. We strongly believe in the future and potential of this company. The board has full confidence in Time Inc. president and CEO Rich Battista and the management team to execute on the strategic plan."
That strategic plan includes a focus on continued growth in digital audiences and digital revenue, led by branded/native content solutions and video, expanding and diversifying revenue and content through brand extensions, including via TV, OTT, events, licensing, new products and strategic partnerships, as well as a focus on cost management and possible asset deals for the purpose of what the company called "selective portfolio rationalization."
Time Warner spun off Time Inc. in 2014 to focus on its entertainment businesses and allow the magazine arm to develop its own strategy.