Time Inc Considers Taking On Private Equity Partner For Yahoo Bid
The deliberations on finding a partner to help fund the potential deal underscore Time Inc's limited resources. Yahoo's web business is estimated to be worth several billion of dollars more than Time Inc's market capitalisation of just $1.6 billion
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The deliberations on finding a partner to help fund the potential deal underscore Time Inc's limited resources. Yahoo's web business is estimated to be worth several billion of dollars more than Time Inc's market capitalisation of just $1.6 billion.
Time Inc held conversations with buyout firms before signing a non-disclosure agreement with Yahoo recently that forbids bidders in the sale process from communicating with each other, the people said this week.
However, Time Inc is hoping that Yahoo will allow bidders to form consortia after they submit first-round bids that are due on April 11, the people added. Time Inc has not yet selected any private equity firm as a potential partner, the people said.
Several private equity firms are weighing bids for Yahoo's internet assets including Blackstone Group LP
A potential deal structure that Time Inc and its investment bankers have been considering is a Reverse Morris Trust, the people said. This could potentially allow Yahoo to divest assets in a tax-efficient manner, the people added.
Spokespeople for Yahoo, Time Inc and the private equity firms declined to comment.
Since Time Inc spun out from parent company Time Warner Inc
The New York-based company, whose titles include People, Sports Illustrated and its namesake Time magazine, has been on a digital shopping spree in recent months.
In February, it acquired Viant Technology, a New York-based marketing firm that owns Myspace, an early social media company. Last fall, it bought HelloGiggles, a lifestyle website owned by actress Zooey Deschanel, and xoJane, an online magazine geared to women.
Yahoo faces increasing pressure from shareholders and investors to sell its core business instead of going through a spinoff that would separate the company from its stakes in Yahoo Japan and Alibaba Group
Analysts see Verizon
Time Inc's revenue annual revenue fell 5 per cent to $3.1 billion last year, with print and advertising revenue falling 10 per cent to $1.32 billion. However, its digital advertising revenues have been on the upswing and rose 11 per cent to $221 million last year.