Talks on to sell Time with backing from billionaire Koch brothers: Report

The surprise entry of Charles G. (left) and David H. Koch in negotiations, could lead to a quick deal between Time Inc and Meredith Corp.
The surprise entry of Charles G. (left) and David H. Koch in negotiations, could lead to a quick deal between Time Inc and Meredith Corp. PHOTOS: KOCH INDUSTRIES INC

NEW YORK (NYTIMES) - Time Inc. is said to be in talks to sell itself to the Meredith Corp, in a deal backed by American billionaire brothers known for supporting conservative causes.

Talks between Time Inc, the publisher of Time and People, and Meredith, the publisher of Family Circle and Better Homes and Gardens, fizzled this year. But the new round of negotiations, motivated by the surprise entry of Charles G. and David H. Koch, could lead to a quick deal, according to people involved in the discussions.

The Kochs have tentatively agreed to back Meredith's offer with an equity injection of more than US$500 million (S$679 million), the people with knowledge of the talks said. A spokesman for the brothers' business, Koch Industries, declined to comment on Wednesday.

Time Inc. also declined to comment. Meredith did not immediately respond to a request for comment.

The companies have been negotiating over the past several days, and Meredith is reviewing the latest Time Inc. financial information.

Although it is unclear whether the proposed deal will reach fruition, both sides hope to move quickly enough to be able to announce a transaction by the end of the month.

The talks are part of the third known attempt by Meredith to purchase Time Inc. In 2013, a deal collapsed when the two publishers could not agree on which magazines Meredith would buy. At the time, Meredith reportedly did not want to acquire four of Time Inc.'s best-known titles: Time, Fortune, Money and Sports Illustrated.

Earlier this year, Meredith was said to have been among parties interested in buying Time Inc. Those discussions ended when Time Inc. said it did not want to sell itself.

An obstacle that stalled negotiations earlier this year was Meredith's inability to secure sufficient financing from banks. With the addition of the Kochs, with their deep pockets and apparent desire to make themselves players on the media landscape, that problem could vanish.

It is not clear how much influence - if any - the Kochs would have on a Meredith-owned Time Inc., if the deal were to go through.

The discussions come during a challenging time for magazine publishers, many of which are trying to remake themselves as multimedia entities. Time Inc has lately shifted its focus from its print magazines as it seeks to attract a sizeable digital audience and pursue new opportunities for revenue growth.

The latest talks between Meredith and Time Inc show the Koch brothers' willingness to give their media ambitions another shot after they explored purchasing the Tribune Co. in 2013.

Founded in 1922 by Henry R. Luce, Time Inc. was at one point among the most influential and authoritative voices in US magazine publishing, with offices overlooking Rockefeller Center and Radio City Music Hall. Through Time and Life magazines, it chronicled the ups and downs of a nation through stellar photography and weekly updates on news, sports and culture.

Koch Industries operates oil refineries in various states and has a hand in numerous other businesses. According to Forbes, it is the second-largest privately operated company in the United States, second only to Cargill, with annual sales revenue of more than US$100 billion.

Charles and David Koch have made hefty donations to various civic and arts organisations, including Lincoln Center, the American Museum of Natural History and the Metropolitan Museum of Art.

Longtime libertarians, they are also prominent backers of conservative causes and candidates. In 1979, David Koch ran as the vice-presidential candidate on the 1980 Libertarian ticket (with Ed Clark at the top of the ticket).

The brothers have continued to influence politics through a Koch-funded nonprofit conservative advocacy group founded in 2004, Americans for Prosperity. In the run-up to the 2016 presidential election, the group spent more than US$720 million to bolster conservative policy positions and candidates.

US Vice President Mike Pence was the main speaker at an Americans for Prosperity gathering in August in Richmond, Virginia. At the time, The New York Times reported that the Koch brothers - once sceptical of President Donald Trump - had moved closer to him, inspired, in part, by his plans to overhaul the tax code.