Time Inc, the publisher of People and Time magazine and Sports Illustrated, is considering a deal to buy the core business of Yahoo, Bloomberg has reported, citing people familiar with the matter. The company said it doesn’t plan to comment on the sales process “until a definitive transaction agreement is reached or a determination has been made that none will be pursued”.
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Valued at $1.5B, Time Inc.is considerably smaller than the competition and is the only company reportedly considering a merger.
The report comes after Yahoo put itself up for sale on Friday, forming a special committee for the search.
Time Inc. recently purchased MySpace parent company Viant Technology Inc.to expand its data-gathering and targeted advertising networks.
It has only been a week since Yahoo announced that it’s open to selling its core business which includes mail, search and news.
Time Inc. appears to be in a deal-making mode.
Such a combination would follow other moves by Time to scoop up online properties in a bid to boost its digital presence and advertising dollars. According to the report, the presentation laid out how the two companies could merge through a tax-free transaction called a “Reverse Morris Trust”, which allows a company to merge with a spun-off subsidiary.
The magazine publisher also reported that its profit fell more than expected during the fourth quarter.
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The stock price of Time declined 2.58% to $13.97 per share at the time of this writing around 12:21 in the afternoon in NY on Tuesday, February 23.
