The magazine publisher and broadcast company Meredith Corp. announced to acquire Time Inc. for $2.8 billion.
The Des Moines, Iowa-based media firm confirmed on Sunday that it will buy the New York-based publisher Time Inc. for $18.50 a share.
The $2.8 billion valued deal which had been approved by both company’s board of directors, includes $1.85 billion in cash and the assumption of debt.
The transaction is backed by the conservative billionaire brothers Charles Koch and David Koch. $650 million was secured by Meredith from the Koch Equity Development, however; the publishing firm stated that no seat on the Meredith board would be acquired by the Koch Equity Development.
The Koch Equity Development which is the private investment arm of Koch Brothers “will have no influence on Meredith’s editorial or managerial operations” as confirmed by the publisher.
Koch brothers are two of the richest men in the world owning a sprawling industrial empire and having an influence on some quarters of the Republican Party. Their involvement in the deal sends speculation racing through media and political experts that doubt if the acquisition might be the ‘next big political play’ by the two moguls.
Meredith had held unsuccessful talks to acquire Time back in 2013 and earlier this year too, but the offers did not pass beyond negotiations.
Meredith’s best-known lifestyle magazines include Better Homes & Gardens and Family Circle while Time owns Entertainment Weekly, People, Sports Illustrated and Fortune magazines.
Meredith’s shares closed at $61, up 13 percent while Time’s stock closed at $16.90, up 2.1 percent on Friday.
Both the publishers like all other traditional publications are struggling to replace shrinking print ad revenue. Readers are migrating towards digital platforms, compressing the print media day by day. Time’s revenue dropped 9 percent to $2 billion in the first nine months of the year as compared to prior year.
Recently, the publisher of Runner’s World and Men’s Health, ‘Rodale’ disclosed that it had been bought by Hearst which owns Esquire and Cosmopolitan.
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