Among the options currently under consideration by UK publishing giant Emap is the disposal of its troubled US subsidiary Petersen Group, acquired for $1.2 billion barely two years ago (January 1999).
Under-performing Petersen, now rebranded Emap USA, has been hard hit by the sharp cutback in magazine ad spending by US auto advertisers. It publishes a rage of titles including Motor Trend, Hot Rod, Teen and Guns & Ammo.
There has been much finger-pointing by analysts, accusing Emap of paying an inflated price for Petersen – a charge denied by the UK publisher which insists that the price paid was “full but fair”. Emap also emphasized its strategic need to acquire a US publisher of substance in order to lend credence to its presence in the American market.
Word in UK media circles is that the Sword of Damocles is poised over the once-golden head of Emap group chief executive Kevin Hands, now facing a deadline of six months to reverse the group’s financial slide after his personally-led foray into the US publishing market [WAMN: 14-Feb-01].
Those close to the situation say that Emap has ruled nothing out. In addition to a possible outright sale, it is also considering alliances with other US publishers in an attempt to cut back office and distribution costs.
News source: Wall Street Journal