The management of Time Inc. (NYSE:TIME) revealed on Friday they are not on sale, sending the stock sliding down by close to 19 percent. Instead, Time has decided to come up with a strategic plan of boosting growth. There has been speculation for several giants that this once-powerful media house might be up for sale, because of falling fortunes in recent times.
The One-Timer Leader Sees Falling Circulation and Readership
The publisher of People and Sports Illustrated magazines concede that sales have plummeted in eight of the last nine months. Like their peers in the publishing business, Time too has seen a dramatic decline in recent times. There has been a massive decline in both circulation and readership, as the consumers have shifted to online publishers. Advertisers too have gone to digital platforms, following the readers.
Time has tried to fix this by going digital, but the growth there has not offset the declines in their print business.
Speaking to the press, Rich Battista, the Chief Executive of Time Inc. said, “The company is definitely not putting itself for sale. The focus now is to execute on our plan”. The plan is to revamp their cost structure and focus more on the digital business. He went on to add, “We strongly believe in the future and potential of this Company. The Board has full confidence in Time Inc.”.
Time Could Still Find a Buyer
However, Battista did reveal that there were quite a few interested buyers. The board has taken the advice of external advisers and evaluated the expressions of interest, and decided against the sale, he added.
But the revival plan may not be the final word on Time Inc. Battista said, “Of course if there is ever another expression of interest that is credible, we have to evaluate it”. According to reports, Time had approached Bank of America Corp and Morgan Stanley for a likely partnership or takeover.
US media group Meredith Corp was one of the bidders. They had made a preliminary offer, but it fell short of what Time was expecting. Time was said to be looking at more than $20 for each share, but the Meredith offer was well below this.
The next critical date for Time could be May 10th when the first-quarter results are slated to be released. They could still find a buyer if Time (NYSE:TIME) is able to meet the expectations of the market. But as of now, investor confidence is down.