Time Inc. headquarters

The long-running sale process for Sports Illustrated parent company Time Inc. may drawing to a conclusion, and the conclusion it seems to be heading for may pose some issues for SI. The company could be sold to Meredith Corp, which has made it clear it’s not that interested in SI. (Update: Although, maybe not. Reuters reports that Meredith’s offer fell short of what Time Inc. wants, so we’ll see if they can work something out.)

The Time Inc. sale process began with a rejected takeover bid from Edgar Bronfman Jr. in November, continued through their search for possible buyers in December, and then segued into them asking for acquisition offers for the whole company around the start of March. Bloomberg’s Alex Sherman (who has led the way on much of this story) reported Wednesday that a sale to Meredith Corp. is “seen as more likely than not“:

Meredith Corp.’s weeks-long pursuit of an acquisition of Time Inc. has advanced into late-stage discussions, according to people familiar with the matter.

While the slow pace has frustrated some involved in the process, a deal is still seen as more likely than not, though there’s no timetable for an agreement to be reached, said two of the people, who asked not to be identified discussing private information. Time’s board met Tuesday for an update on the sale talks, one person said.

Other potential buyers, including a consortium led by Pamplona Capital Management, also remain in discussions for Time, said the people, with some parties offering partial investments rather than a full takeover. One bidder, a large U.S. publicly traded company, isn’t actively involved in discussions but has told Time it may want to make an offer once it sees how talks with other bidders shake out, the people said.

However, the report from Reuters’ Lauren Hirsch and Jessica Toonkel later Wednesday made this seem much less likely to end soon with a Meredith deal:

U.S. media group Meredith Corp (MDP.N) has made a preliminary acquisition offer to Time Inc (TIME.N) that fell short of the price expectations of the publisher of Sports Illustrated and Fortune magazines, according to people familiar with the matter.

The gap in valuation expectations could represent a setback to Time Inc’s efforts to sell itself. It comes after an investor group led by former music executive Edgar Bronfman Jr abandoned its pursuit of Time Inc in March, following a $1.8 billion offer it made late last year.

While Time Inc is looking to sell itself for more than $20 per share, Meredith has so far made a preliminary offer with a price range that values it below that, the people said this week. The exact price range that Meredith has offered could not be learned.

The sources cautioned that Time Inc is still willing to engage with Meredith in price negotiations, which have yet to kick off in earnest. Time Inc has also been pursuing offers from other parties in what is sees as a competitive sale process, according to the sources.

If a Meredith deal did somehow still go through, what would this mean for SI? Well, Meredith’s publishing division (they also own 15 television stations, but it’s the publishing side that’s the most relevant here) is primarily known for female-focused brands such as Better Homes and Gardens, Country Life, Midwest Living and Traditional Home), and their interest has reportedly been mostly in Time Inc. brands that would fit that portfolio (including In Style, Real Simple, and People). Meredith made an offer for the non-news, non-sports brands of Time Warner back in 2013, but the company opted to spin all of its titles off into Time Inc. instead. The Meredith focus on only those titles doesn’t really seem to have shifted, as per a MergerMarket report from December:

All three bankers said that Meredith has made clear that it is only interested in the parts of Time’s portfolio that would fit with its largely female-oriented lifestyle brands, and is uninterested in titles like Sports Illustrated.

That’s quite different from groups like Bronfman’s that were highly focused on SI and what they could do with it. Of course, even a Meredith acquisition wouldn’t necessarily alter the state of things at SI: the new owners could opt to maintain the status quote there (which notably has already seen them decrease their print run and go to more double issues, reducing costs and boosting their emphasis on digital), or they could sell off SI and other titles they don’t want. And a Meredith acquisition may not even happen now with that bid reportedly coming in under what Time Inc. would accept. But still, Meredith could pull this off, as Reuters reports that price negotiations “have yet to kick off in earnest.” If Meredith does get SI, many will be wondering what’s next for SI.

[Reuters]

About Andrew Bucholtz

Andrew Bucholtz is a staff writer for Awful Announcing.