Posted by: Tom Lowry on September 29, 2009
Revised bids are due today for BusinessWeek and at least four parties are still competing to own the 80-year-old magazine, according to executives familiar with the process.
With the latest bids submitted, it could be less than a week before BusinessWeek’s parent, McGraw-Hill Companies, announces a winner. Since BusinessWeek represents less than 10% of its parent’s overall revenues, it is not clear whether the sale is a material event that would require a board vote.
Bankers frequently allow for revised bids in case potential buyers weren’t fully prepared initially, or that the parties learn of new information during interim due diligence.
Among those submitting revised bids were financial data giant Bloomberg LP, private equity firm Open Gate Capital, and investment firm ZelnickMedia LLC. At least one other bidder, which BusinessWeek was not able to identify, also submitted a bid. Spokespersons for Bloomberg, Open Gate and ZelnickMedia declined to comment. McGraw-Hill spokesman Steve Weiss declined to comment, other than to say: “We are pleased that the process, which will take some time to complete, continues to go well.”
It is not clear what the bidders offered for the magazine, or whether offers exceeded what McGraw-Hill might be willing to absorb, if anything, in terms of liabilities, from possible severances to penalties for ending contracts early.
Bloomberg appears to be the most aggressive in its pursuit of BusinessWeek. Norm Pearlstine, Bloomberg’s chief content officer, held discussions last week, in person and over the phone, with BusinessWeek’s top editors. Among those Pearlstine spoke with were editor-in-chief Stephen Adler, executive editors Ellen Pollock and John Byrne, and managing editor Ciro Scotti. Topics discussed in those one-on-one sessions were wide-ranging, including the possibility of integrating Bloomberg Professional stories into the magazine and a willingness on Bloomberg’s part to add more editorial pages to the magazine. That suggests Bloomberg might be looking at tinkering with BusinessWeek’s traditional 60-40 mix of editorial pages to ad pages.
Since BusinessWeek first disclosed that ZelnickMedia, co-founded by veteran music and movie executive Strauss Zelnick, was being advised by former Wall Street Journal publisher Gordon Crovitz, it has become more clear what kind of role Crovitz might play at BusinessWeek if Zelnick is successful. Instead of being a hands-on editor or publisher, Crovitz would most likely play an advisory role and sit on a board that oversees the magazine’s operation. Crovitz declined to comment.