To everything there is a season, and the season for magazines has passed and will not return. In the summer of 2014, Time Warner(TWX) spun off Time, Inc.(TIME), its magazine publishing division. Joe Ripp, the CEO who presided over the spinoff, valiantly tried to cut costs and move to digital, but his efforts fell short. This summer, he was “ripp-ed” from the headlines, putatively stepping down for health reasons. The company and its stock continued to languish until the NY Post reported last week that a group led by Seagram’s heir Edgar Bronfman, Jr. had offered $18 a share in cash to buy the company. This offer represented a 30% premium to Friday’s price, and is above the company’s 52 week high. The offer from the group, which also included Len Blavatnik and Ynon Kreiz, was rejected by Time’s board.
Shareholders seem to believe that the company is now in play and there will ultimately be a deal. Since the story broke, the stock has risen over 20%. The offer was well below the company’s post spinoff high, but seems quite generous given the struggles of the past few quarters. Hedge fund Jana Partners is a major holder of the stock and will likely be applying pressure to consummate a sale.
Disclosure: The author holds no position in any stock mentioned