Market Interest Notwithstanding, United News Says It Will Keep CMP
Schwartz, Matthew, Gonser, Sarah, Folio: the Magazine for Magazine Management
But GMPNet will go public, and speculation swirls around an endgame strategy for selling the entire business.
United News & Media has for now put to rest rumors about what it intends to do with CMP Media, the computer publishing giant and very valuable asset United decided to keep when it sold Miller Freeman USA to VNU for $650 million in July.
However, the company did say it will take CMPNet, the Web business based in part on the CMP magazines, public at an "optimal time for a flotation of this business." In its first-half earnings statement released early last month, and in comments to the press, United executives stressed that despite apparently strong market interest in CMP, the company is going to build on its United States businesses, CMP, PR Newswire and UIG.
"CMP is a very important part of our strategy," says United News & Media spokesman Nigel Main. "High-tech is an extremely important market, and CMP is the leader in the field--way ahead of Ziff and IDG. Although there might be market interest, CMP remains a core part of United and will remain so going forward."
Regarding CMPNet, an Internet company with 105 Web sites that was originally a subsidiary of CMP but is now a separate company, United says it is currently assessing market conditions in the United States.
United News & Media acquired CMP in May 1999 for $920 million and merged it with Miller Freeman Inc., which it had acquired in 1985. Then, in November, United switched gears and announced that it was merging with the British television giant Carlton Communications and would be divesting key assets, including most of the non-CMP part of Miller Freeman. In addition to the Miller Freeman deal, United sold Miller Freeman Europe to Reed Elsevier for $546 million and its television production and distribution business to Granada Media PLC for $2.7 billion.
But the deal with Carlton collapsed, and United News is now left to decide how to provide shareholder value with so fewer assets. United is an "unusual place," says Penton Media CEO Tom Kemp, himself a former longtime United employee when he was with Miller Freeman. "They can't be stationary. They have to do something in light of the Carlton deal falling through and figure out an endgame strategy for shareholders."
"Selling CMP has got to be an option," adds Bob Krakoff, chairman and CEO of Advanstar Communications, a company whose owner, the equity firm Hellman & Friedman, has put it on the block. …