U.S. media group Meredith has made a preliminary acquisition offer to Time that fell short of the price expectations of the publisher of Sports Illustrated and Fortune magazines, according to people familiar with the matter.
The significant gap in valuation expectations could represent a setback to Time’s efforts to sell itself. It comes after an investor group led by former music executive Edgar Bronfman, Jr., abandoned its pursuit of Time in March, following a $1.8 billion offer it made late last year.
While Time 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 is still willing to engage with Meredith in price negotiations, which have yet to kick off in earnest.
Time has also been pursuing offers from other parties in what it sees as a competitive sale process, according to the sources.
An investment group led by private equity firm Pamplona Capital Management remains interested in Time, but it also considers it unlikely that it can meet its price expectations, according to the sources.
The sources asked not to be identified because the sale process is confidential. Time, Meredith and Pamplona declined to comment.
An acquisition of Time would give Meredith the scale required to spin off its broadcasting arm into a standalone company. Many of Meredith’s competitors, from Tronc to Tribune Media, have shed their publishing operations following a drop in print advertising revenue.
Time has been weighing a sale of the company for the past several months, amid a decline in earnings.
For the fourth quarter, the company reported lower-than-expected quarterly profit and revenue. Print ad revenue, which accounts for more than two-thirds of its total ad sales, fell 10.2 percent in the three months to Dec. 31, from a year earlier.
This would not be the first time that Meredith has come close to buying Time. In 2013 Meredith and Time Inc.’s owner at the time, Time Warner, were in talks about a deal for Time Inc., but the discussions ended unsuccessfully. Time Warner then spun off Time as a stand-alone company in 2014.
Time has since made attempts to expand beyond its print roots by going on a shopping spree for digital media firms. It acquired Viant Technology, a New York-based marketing firm that owns Myspace, an early social media company.
Time replaced its chief executive last year after activist hedge fund Jana Partners unveiled a stake in the company. The deadline for any activist shareholder to put forward nominees to challenge the company’s board director picks is April 21.
Meredith tried to buy Richmond, Virginia-based broadcaster Media General for $2.34 billion in 2015, but Nexstar Broadcasting swooped in with a higher bid, acquiring Media General for $4.6 billion.