|TIME INC CEO RICH BATTISTA|
Time Inc has been in a constant state of change since its spinoff from parent company Time Warner just under three years ago. The company like many of its competitors joined the digital game late, but has made up some ground. However, the made up ground has not been enough to fill the huge gaps created by the perpetual collapse of print related revenue. The company has spent millions buying up every website it could get its hands on and launched a creative and content studio called The Foundry which launched websites like, ExtraCrispy.com, TheDrive.com and Mimi. The company also made some drastic moves like eliminating the role of publisher and creating brand GMs in its place. But the biggest change at the company took place earlier this fall when People/Entertainment Weekly President Rich Battista (as we predicted) was elevated to CEO of the entire company replacing Joe Ripp who has been CEO right before and then after the spin off. Mr. Battista moved quickly to put his hand picked lieutenants in place starting with Jen Wong who he elevated to COO making her his number two. He then started to remove Ripp era executives like CFO Jeff Bairstow. The Leadership at the company has never been this young, at least not in recent times. All these moves are part of the effort to leave its print history in the past. Now Rich Battista has yet another task on his plate and that task is to sell the company to the highest bidder.
On Monday it was revealed that Time Inc turned down a $1.8 billion unsolicited offer from a consortium of deep pocketed investors lead by Edgar Bronfman Jr. The offer was a 30% premium over the company’s stock price but it apparently wasn’t enough to get Time Inc’s board to bite. Wall Street on the other hand, loved the idea of a Time Inc sale so much that the company’s sleepy stock enjoyed an almost 20% surge. So what will happen next? Will the consortium come back to the table with another offer, this time at the $2 billion mark? Or will other potential buyers join the party and start an unexpected bidding war for a company that made no money in 2016? That fact didn’t seem to deter the Bronfman consortium because Time Inc’s brands more than most out there, speak for themselves. The offer was no doubt a wake up call for the company. Since its spinoff, its stock price has mostly struggled and Wall Street’s confidence never improved. The offer is a sign that there are actually people out there willing to buy it. The only other known interest came from Meredith who was kicking the tires on possible merger. We can’t help but think that Time Inc’s board and management are brainstorming on how to attract more and even bigger offers, because someone actually wants this thing. But what exactly would investors do with the company? It was pointed out that none of the men behind the takeover offer, Edgar Bronfman, Len Blavatnik or Ynon Kreiz have a publishing background. But who are we kidding, we all know that doesn’t matter, especially being that the company is shifting from that model anyway. It’s not what you know, but who you know. Meaning, surely these men would install individuals with the right background to lead the company, assuming they would chose to. Any new owner of Time Inc will probably focus on wringing more content out of the brands to produce TV shows, movies, videos, merchandise, and events. In the end, Time Inc’s brass may have no choice but to seriously entertain an offer, especially if a better one lands on their boardroom table. Because at the end of the day, Investors will take the opportunity to cash out and move on, than continue to hang their financial hopes on uncertainty. Afterall, its Rich Battista’s job as CEO to deliver shareholder value.
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