Luisa Beltran
Two years after famously acquiring TV Guide for just $1, OpenGate Capital says that the weekly magazine has reached profitability. I met earlier today with OpenGate CEO Andrew Nikou, who was in New York for undisclosed reasons (it probably rhymes with "booze leak"). He told me that TV Guide was unprofitable and generating double-digit losses when acquired by OpenGate, in a deal that included around $50 million in assumed liabilities. Now, however, the slimmed-down company apparently is generating income in the mid-to high single digit millions. "It was the gem that not many people realized existed," Nikou said. "Four to five years ago they were a $500 million business, but they've downsized to reflect the current business model." Indeed, cutting back has been TV Guide's path to profitability. Its ad pages, for example fell 16% year-over-year, according to data from Media Monitor. Paid circulation also dropped, from 3.2 million in 2008 to 2 million today. Nikjou acknowledged the circ figures, but argued that it was a planned pruning in which the company eliminated unprofitable subscribers to focus on "clean" ones. Moreover, he said the company refocused on "TV enthusiasts" who still consider TV Guide as the source to find "what’s worth watching."
Lincoln Financial this week became the latest bank to repay its TARP funds, in part thanks to last year's sale of money management unit Delaware Investments to Macquarie Group. Kind of like how BoA paid back a bunch of money thanks, in part, to the sale of First Republic Bank to Colony Capital and General Atlantic. But never fear financial buyers: A smattering of TARP repayments does not mean that banks are no longer a source of sell-side dealflow. As one PE exec said: “There are plenty of troubled banks with more than 700 on FDIC troubled bank list.” In fact, the FDIC lists 251 banks that have failed this year. Banks, even the problem ones, provide a chance for buyout shops to buy cheap deposits that can be grown and loaned out for decent returns. Well, most of the time (think TPG's WaMu debacle).
BP Suspends Dividend: After causing the oil disaster in the Gulf, BP decides not to pay its investors loads of cash. Oprah Keeps Giving: The talk show host gave Apple iPads and $10,000 checks to every staffer at O, The Oprah Magazine. Her highness handed the stuff out personally. Hooking up with an Apple lover: Dating site, Cupidtino, aims to connect Apple aficionados with like-minded "Machearts." But what about PC lovers? No fair! Washington Post Shares Halted: Did news of the Newsweek auction stop Post shares from trading? Apparently not. Washington Post shares spiked higher Wednesday and triggered the first use of a new circuit breaker created after the "flash crash" in May. Bummer.
The skies in New York are clouding over, but I do have an update on the sale of Executive Health Resources. peHUB has learned that ABRY Partners, which owns Executive Health, sent books out about six weeks ago. They targeted all the big buyout shops, or at least those that could write equity checks of […]
The auction of Executive Health Resources may be hot, but is healthcare M&A also popping? Well, not really. Healthcare mergers so far this year aren’t on fire. In fact, they’re lower than 2009. There were 283 U.S. announced healthcare transactions so far this year, raising $26.9 billion. This compares to last year when there were […]
ABRY Partners has put healthcare outsourcer Executive Health Resources on the block, peHUB has learned. UBS is advising on the auction that is now in the late stages, according to multiple sources. It’s not clear how much ABRY owns of Executive Health, except that it's believed to be "a significant stake." Executive Health’s management also owns a chunk.
The Newsweek auction has taken a turn toward the fanciful. The weekly magazine, which was put up for sale last month by The Washington Post Co., is seeking bids of between $15 million and $20 million, according to a banking source said. The relatively high price tag comes despite the fact that Newsweek does not have EBITDA. “No, I don’t think they will get it,” the source said. Is this a wild swing for the fences? Is it just a trial balloon? Maybe a bit of both, since a buyside source said he hadn't heard the $20 million figure (no comment on the $15m).
BP Gets Scared: BP has hired Goldman Sachs, Credit Suisse and the Blackstone Group to to advise on its options as it faces financial and political pressure over the Gulf of Mexico oil spill. Who would buy them? Free WiFi with your latte: Starbucks said it will provide free WiFi in all its stores beginning on July 1. Hooray! Embezzling for that perfect fern: Scott Welch allegedly stole $11.2 million from Wachovia and use the money to landscape. This is not a joke. Another blow to books: News Corp. inks a deal to buy Skiff, the e-reader company backed by the Hearst Corporation.
Wendy’s may not have enough beef for private equity. Last Friday, Nelson Peltz, the billionaire investor who owns 23% of the restaurant chain and its sister beef-slinger Arby's, disclosed that an “unnamed third party” had expressed interest in partnering on a potential acquisition. The admission caused Wendy’s shares to pop more than 7 percent. Rumors are circulating that the mystery suitor is THL Partners, is back for fast-food redemption. If case you’d forgotten, the buyout firm had a deal in February to buy CKE Restaurants, which operates Carl’s Jr. and Hardee’s restaurants, for $11.05 a share, or about $619 million. But then Apollo Management swooped in with a higher offer of $12.55 a shares, or $694 million, to seal the deal. On Monday, any hope of a THL-Peltz combined bid got deflated, as the New York Post said Peltz just isn’t interested in partnering with any third party. Peltz, the story said, could take the company private and restructure troubled Arby’s away from the glare of public speculation. Then, Peltz could return Wendy’s to the public markets (maybe with Arby's, if it's running leaner).
It’s a lazy late-spring Friday in New York. With the sun shining, and the weather nice, it’s hard to get anyone on the phone. So I wonder: what do PE execs do on Fridays? After covering M&A and buyouts for so many years, I am often left wondering whether they lead normal, mortal lives. For some reason, I can’t imagine Steve Schwarzman trolling the aisles of a Safeway or weeding his front lawn. I imagine him jetting to Monaco to lounge poolside. I also figure he cuts out early, but a call to Blackstone’s New York office reveals that Schwarzman is indeed at work at 4:15 p.m. “He just passed my desk and just checked the Bloomberg,” one person said. It was not immediately clear if Schwarzman would be throwing himself another party this weekend. Calls to several other PE Execs revealed they also had yet to start their weekends. One executive said he was staying at the office and plans to do that for most of the summer. “More Fridays [are spent] working this year as people need to put money to work and deal flow is pretty good,” he said. This particular executive said that he more typically spends his summer weekends at his horse farm in New Jersey.