Published: Tue, November 28, 2017
Markets | By Erika Turner

Meredith to buy Time for $3.8b in all-cash transaction

Meredith to buy Time for $3.8b in all-cash transaction

Meredith Corp is buying Time Inc for about $1.8bn (£1.35bn), a deal CEO Stephen Lacy called "a transformative and financially compelling growth opportunity" that joins two giant magazine companies. Koch Equity Development, the brothers' investment firm, is putting up $650 million to receive preferred equity in the deal.

The deal is valued at $1.84 billion based on the offering price and number of shares of Time outstanding on September 30.

The deal gives Meredith, publisher of Better Homes & Gardens, a larger audience at a time when publishers need to get bigger to compete with Facebook and Google in advertising. And its revenue has dropped consistently over the a year ago and a half.

"We are creating a premier media company serving almost 200 million American consumers across industry-leading digital, television, print, video, mobile, and social platforms positioned for growth", Meredith chairman and CEO Stephen M. Lacy said in a statement.

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The move to merge the companies has pushed the publisher up the ranks, enabling it to now take a place in the top ten digital media companies globally.

Time has been reeling under the same pressures facing the rest of the magazine industry. The Journal reported that Iowa-based Meredith has agreed to pay $18.50 a share in cash - a 46% premium from Time's stock at the time acquisition talks were first reported on November 15.

Meredith's offer is for $18.50 per Time share, up about 10% from the shares' closing price of $16.90 Friday. It has traded between $9.90 and $20.40 a share over the past 52 weeks. Meredith approached Time again earlier this year, but those discussions also stalled when Meredith reportedly failed to secure enough bank financing for the acquisition. Time magazine responded on its own account that Trump didn't understand the selection process and several comics offered their own mocking tweets as well.

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