fashion-memopad
fashion-memopad

Memo Pad: Hearst and Lagardère Negotiate... Time Inc. P.R. Chief Departs...

New Hearst president David Carey confirms the company is negotiating with Lagardère to acquire a majority of the conglomerate's magazine portfolio.

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NEW REGIMES AND NEW GOALS: While former Hearst Magazines president and chairwoman Cathie Black was making her way around New York’s five boroughs on Monday, on her first official day as schools chancellor, her successor as president, David Carey, began the new year with a cheery e-mail to Hearst colleagues, where he also confirmed the company has entered into a period of exclusive negotiations with Lagardère to acquire a majority of the French conglomerate’s global magazine portfolio. “While I can’t comment further at this time, this announcement speaks volumes about our belief in the magazine medium — in print today, plus its many other expressions tomorrow, and in the value of premium content throughout the world,” Carey wrote.

Hearst and Lagardère have until Jan. 30 to negotiate the sale in an all-cash transaction, Lagardère said. The news sent Lagardère shares ahead 9.37 percent on the Paris stock exchange to close at 33.72 euros, or $45.09 at current exchange. If the deal comes to fruition, Hearst will elbow out Condé Nast to become the second-largest magazine publisher behind Time Inc.

Germany’s Bauer Publications and Meredith Corp. were also reportedly in the running with Hearst, though Lagardère officials declined to provide any additional comment on the sale.

Lagardère plans to hold on to its French division and is insisting it retain editorial control over foreign editions of Elle — sort of like getting rid of the bathwater but keeping the baby. That could be the Gordian knot in the deal, because how does a firm sell a company yet retain control? Who would Robbie Myers, editor in chief of Elle U.S., report to — Hearst or Lagardère? Not that Hearst isn’t accustomed to such arrangements — its deal to publish O, The Oprah Magazine leaves editorial control in the hands of Oprah Winfrey, Food Network is a 50-50 joint venture with the Scripps Networks and in the past it has had similar agreements in publishing Talk magazine and Smart Money.

Lagardère’s overseas magazine business generated revenues of 700 to 800 million euros, or $976 million to $1.1 billion, in 2009 out of total revenues of 1.3 billion euros, or $1.8 billion, for the periodicals division as a whole. — Amy Wicks and Joelle Diderich

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