Forbes Media LLC’s effort to find a buyer is running into trouble, with one potential bidder officially out of the running and two others no longer in active talks, people with knowledge of the matter said.
Germany’s Axel Springer SE, which publishes the Russian edition of the magazine, isn’t involved in any process to acquire Forbes, Edda Fels, a spokeswoman, said yesterday. The company had been interested in bidding for the New York-based publisher, people with knowledge of the matter said in February.
Singapore’s Spice Global Investments Pvt also has removed itself from the process, said one of people, who asked not to be identified discussing private information. China’s Fosun International Ltd. hasn’t held active talks for the asset for some time, another person said. Those buyers decided that Forbes was asking too high a price, both people said.
Forbes, which is working with Deutsche Bank AG on the sale, is seeking as much as $400 million, people with knowledge of the matter said in November. Final bids were due in February, people familiar with the situation said at the time.
Mia Carbonell, a spokeswoman for Forbes, declined to comment. Mayura Hooper, a spokeswoman for Deutsche Bank, didn’t immediately respond to a request for comment outside of regular business hours. Representatives for Spice Global and Fosun weren’t immediately available for comment. Axel Springer, Spice and Fosun were the only bidders known to be interested in buying Forbes, the people familiar with the situation said.
Axel Springer shares rose 0.4 percent to 43.81 euros as of 2:14 p.m. in Frankfurt today, for a 12-month gain of 26 percent. Fosun added 0.5 percent to HK$9.84 at the market close in Hong Kong.
The sale of Forbes, famous for tracking the wealth of billionaires across the globe, follows years of dwindling profits as the rise of digital media ate into advertising at the magazine. During the sale process, Forbes executives emphasized the brand as a platform for events and conferences as well as real estate developments -- a way to extend beyond its traditional media roots.
Steve Forbes, the company’s chairman and the magazine’s editor-in-chief, wanted a significant role after the company’s sale, according to one of the people. His potential influence over the company scared away potential buyers that wanted to run the entity their way, the person said. If no outside buyer is chosen, Forbes may attempt a management buyout of the company, two of the people said.
Forbes projected revenue of $144.6 million for 2013 and $162.8 million for 2014, according to the pitch book obtained by Ken Doctor, a media analyst for Outsell Inc. Doctor published the contents of the documents on the website of Harvard University’s Nieman Journalism Lab.
The company also estimated that its earnings before interest, taxes, depreciation and amortization would reach $33.4 million this year, the documents show. Magazines typically sell for 5 or 6 times Ebitda, implying a value of about $200 million for Forbes, Doctor said.
The Forbes family had tried to stabilize its fortune by selling a 45 percent stake in the company to venture capital firm Elevation Partners in 2006 for about $240 million. They also raised money through asset sales including the Manhattan headquarters building, their collection of Faberge eggs and the licensing of their name to a real-estate venture and an online for-profit education company.
B.C. Forbes founded the magazine in 1917 and it prospered under his son Malcolm, becoming a champion of capitalism and a showcase for American wealth -- including Malcolm’s. Steve, B.C.’s grandson, ascended to president and CEO of Forbes and editor-in-chief of the magazine in 1990. He ran unsuccessfully for U.S. president as a Republican candidate in the 1996 and 2000 primaries.
While the company prospered during the dot-com boom, the subsequent bust in 2000 and migration of advertising from print to online sites took a toll on its finances. The publisher has since aggressively pursued online marketing deals, known as “native advertising,” allowing paying advertisers to publish their own content on the Forbes website.
The family got a $400 million buyout offer from fashion publisher Conde Nast in 2004, which it turned down because it wasn’t high enough, according to Stewart Pinkerton’s 2011 book “The Fall of the House of Forbes.”
Bloomberg News, which publishes its own ranking of the world’s billionaires, competes with Forbes.