Emap Loses Nearly $1 Billion on Sale of US Subsidiary

02 July 2001

Emap has struck a $515 million deal with US publisher Petersen Publishing that will relieve the London-headquartered media giant of Petersen Publishing, its primary US business operation, acquired three years ago for $1.5 billion.

The purchase of Petersen in 1998 has cost Emap dear, hanging a massive millstone of debt around its neck, eroding profit and ousting the deal’s principal architect, former Emap chief executive Kevin Hand [WAMN: 29-May-01].

Primedia will pay $505m in cash plus an additional sum in warrants, the latter valued by Merrill Lynch at around $10m. This totals barely one third of the sum originally paid by Emap which, say sources, had hoped to recoup around $600m for the Petersen properties.

These number over sixty titles, mainly enthusiast-oriented, such as Motor Trend, Guns & Ammo, Hot Rod and Skin Diver. Also included is Teen magazine; but the stateside edition of successful risqué men’s title FHM remains in the Emap stable.

The enlarged operation, headed by John Loughlin, chief executive of Primedia’s consumer magazine division, encompasses some 280 consumer and B2B titles, making it America’s second largest magazine publisher after AOL Time Warner.

News source: New York Times