A Buyer for Fast Company and Inc.?

The investment research firm Morningstar's Joe Mansueto is the front-runner in the bidding for Gruner + Jahr's business titles

Joe Mansueto, founder and chairman of Chicago-based investment research firm Morningstar (MORN ), has emerged as the front-runner for Gruner + Jahr USA Publishing's business magazines, Inc. and Fast Company, and is in late-stage negotiations to purchase the titles, executives close to the deal said this weekend.

No agreement has been struck yet, although one could made by the middle of this week. Mansueto's bid is described as narrowly nosing out a runner-up offer from The Economist Group, which besides the venerated newsweekly also publishes CFO magazine. It's unclear what the precise valuations of the bids are, although one executive familiar with the deal says previous press accounts placing the offers from five finalists above $40 million are roughly accurate. Bids from Mansueto and The Economist apparently beat out those of the other finalists, Advance Publications' American City Business Journals unit and venture-capital firms Abry Partners and Alta Communications.

At these price levels, the deal testifies to the enormous erosion in the magazines' value that occurred after G+J purchased both at the height of dot-com era media valuations in 2000. It bought Inc. for $200 million in June, 2000, and it paid over $300 million for Fast Company in December of that year.

END OF A RUN. Both magazines suffered severely once the dot-com boom passed, though, and now run a fraction of the ad pages they formerly did. According to Publishers Information Bureau, for the first five months of this year Inc.'s ad pages were down 7.2%, to 314.7, and Fast Company's fell 15.4%, to 188.2. To put these volumes in perspective, in 2000, Fast Company ran over 2,100 ad pages, and Inc. ran almost 1,750.

Executives say Mansueto is virtually alone among serious bidders in wanting to keep publishing Fast Company. They also say he appears likely to keep those titles based in New York. A spokeswoman for G+J declined to comment, and a spokeswoman for Morningstar says Mansueto was not commenting on the situation. A spokesman for The Economist also had no comment.

When completed, the deal will mark the end of G+J's American publishing unit. Earlier this month, it finalized a sale of its other titles -- Family Circle, Parents, Child, and Fitness -- to Meredith (MDP ) for $350 million.

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