Summary:
Sun Media Corporation IPO
Readers Digest Annual Meeting: No Family Affair
For the Kids, Scholastic Says 'So Long, SOHO'
Board Changes at Pearson plc
Starwood to sell ITT directories unit for $2.1 billion
Town & Country
Knight-Ridder, NYT Report Online Losses
Barnes & Noble, AOL Make Deal
RECENT NEWS
Sun Media Corporation IPO
TORONTO, Dec. 3 /CNW-PRN/ - Sun Media Corporation announced that it has filed a prospectus with the securities regulatory authorities in each of the provinces of Canada for a combined initial public offering and secondary offering of approximately 23 million common shares in such provinces at a price of $13.50 per share. Sun Media is the second largest daily newspaper publishing group in Canada in terms of circulation and currently publishes five daily newspapers in major urban centers in Canada (The Toronto Sun, The Edmonton Sun, The Calgary Sun, The Ottawa Sun and The London Free Press) and The Financial Post, which is 80% owned by Sun Media. Sun Media's Community Newspaper Group also publishes five daily community newspapers, 80 weekly community newspapers and shopping guides in Canada and in Florida and 17 farming and other specialty publications. SOURCE Sun Media Corporation
Readers Digest Annual Meeting: No Family Affair
Reader's Digest held its annual shareholders meeting last week and, unlike many of the 75-year old company's publications, it was far from family fare. Angry shareholders complained about flagging share prices, fiscal irresponsibility and ineffective leadership, according to Reuters. Among the complaints: the company reportedly borrowed $100 million this year to pay out a 90 cent dividend. Under questioning, the company reportedly admitted that it actually had not earned its dividend for the past three years. Meanwhile chairman and CEO George Grune urged dissenters to be patient. As part of a promised turn-around, he reportedly said the company was re-evaluating its business alliances with Meredith Corp., PBS, Sears, Roebuck and Co., Spiegel Inc. and Avon Products Inc.
The company also was lambasted for its aging board. For example, one shareholder reportedly singled out board member Melvin Laird who, at 75, was the U.S. Secretary of State under former President Richard M. Nixon. The company paid Laird $400,000 for consulting services last year. Mediacentral: 12/16
For the Kids, Scholastic Says 'So Long, SOHO' (Folio: First Day)
Scholastic Corp. certainly is serious about this core-business-focus stuff that corporations are always prattling about in their life-imitates-Dilbert manner. To hear Scholastic executive VP Hugh Roome tell it, the $1-billion children's publisher will unburden itself of several profitable operations when it completes the sale of its SOHO Group [small office/home office] to privately held CurtCo Freedom Group in the next four weeks. The plum properties in the deal, announced last Thursday and valued at $20 million, are Home Office Computing -- launched 15 years ago by Scholastic as Family Computing -- and HOC offshoot Small Business Computing.
Roome, hired by New York-based Scholastic seven years ago to re-launch Family Computing as HOC, says that both HOC and SBC are profitable; so, he said, is Scholastic's six-year-old SOHO Custom Publishing unit. Its projects have included Small Business, produced for Microsoft, and Small Business Handbook, of which it sold 100,000 copies to AT&T. The unit also puts out four newsletters with total circulation of 2 million. Other properties acquired by CurtCo include HOC Online (www.smalloffice.com), which Roome said has sold out its banner-ad space 18 months running. Roome said the SOHO Group's 50-odd employees will move to Curt Co's expanding offices on West 56th Street in Manhattan and that he doesn't believe any of those personnel will be cut. In its announcement of the acquisition, the privately held CurtCo, based in Malibu, CA, pointed to the "synergy" Scholastic's SOHO Group has with such CurtCo magazines -- it publishes 21 along with 27 daily newspapers -- as Portable Computing Direct Shopper, Mobile Computing & Communications and Sales & Field Force Automation.
HOC's paid circulation rose by 2.4% to 461,353, thanks to a 20,000-plus increase in subscriptions to 441,000 in the first six months of 1997 compared with the first half of '96, according to the Audit Bureau of Circulation’s. Single-copy sales averaged 20,361, a 32% decline. Ad pages through November totaled 903, a 1.5% improvement over 890 in the first 11 months of '96; ad dollars rose 15.8% to $22.4 million from $19.4 million, according to Publishers Information Bureau. Small Business Computing, launched in January 1996, has controlled circulation of 140,000. CurtCo president and CEO William J. Curtis didn't return calls from First Day, but Roome said CurtCo "has intentions to expand the magazines' circulation’s in many dimensions and build other spin-off properties."
Sources familiar with the transaction's history said bidders for Scholastic's SOHO Group at one time or another have included Inc. magazine and Cowles Business Media. Roome acknowledges that it received unsolicited bids for the SOHO Group four years ago; at that time, those same sources said, the SOHO Group could have fetched a much higher price. New York investment banking firms DeSilva & Phillips Inc. and Veronis, Suhler & Associates Inc. represented CurtCo and Scholastic, respectively, in the transaction. (Neil Cassidy) Source: Mediacentral 12/15
Board Changes at Pearson plc
David Veit and Pehr Gyllenhammar are to step down from the board of directors of Pearson plc. David Veit, 59, an executive director and president of Pearson Inc, will retire at the company’s annual general meeting next May. He has been a Pearson director since 1981 and the senior Pearson executive in the United States for more than twenty years. Pehr Gyllenhammar, 62, who has been a non-executive director since 1983, will retire from the board at the end of December 1997. Source: Pearson plc 17th December 1997
Starwood to sell ITT directories unit for $2.1 billion
NEW YORK, Dec 18 (Reuters) - Starwood Lodging Trust, the victor in one of the year's biggest takeover fights, began on Thursday to break apart its prize. The real estate and hotel investment trust announced plans to sell ITT Corp.'s highly-profitable telephone directories business for $2.1 billion to Dutch publisher NV Verenigd Bezit VNU (OTC BB:VNUNY - news; VNUN.AS). The sale, which is contingent upon the completion of the proposed $10.2 billion ITT-Starwood transaction, came sooner than expected and is the first of several non-core assets expected to be sold by Starwood. Phoenix-based Starwood said it would use proceeds of the sale to reduce debt associated with the acquisition of ITT.
VNU, one of the world's largest information companies, is the dominant publisher of consumer magazines in the Netherlands and Belgium. It said the directories business had sales of about $545 million last year and earnings before interest, taxes and depreciation of about $178 million. ``This fits very well with our present portfolio. Half of (ITT World Directories) is aimed at the consumer, but the other half is aimed at the business to business segment,'' VNU Chief Financial Officer Frans Cremers said in Amsterdam. The Dutch firm was one of several companies that had expressed interest to ITT earlier this year when it was selling assets to defend itself against Hilton's hostile bid. ITT later abandoned that plan and sealed a transaction with Starwood. Although the unit has strong profit margins, it is a slow-growth business and was not considered to be a core asset for either ITT or Starwood.
VNU also publishes newspapers in the Netherlands and is active in business information in the United States and Europe. Cremers said in an interview that the ITT directories business was about evenly split between consumer and professional markets, like VNU itself. ``We are committed to both sectors. We want to grow in three areas: marketing information, trade journals and consumer information,'' he said. Cremers said VNU also had been attracted to ITT World Directories because the company.
For Those Last Minute Gifts… Town & Country's Top Ten Gift Ideas for the Holiday Season
Addressing different aspects of life such as beauty, kitchen and home, clothing and charity, Editor-in-Chief Pamela Fiori suggests imaginative gifts in a variety of price ranges. With that in mind, her favorite beauty picks include: --Estee Lauder Re-Nutriv Intensive Lifting Cream ($150) --Annick Goutal Eau d'Hadrian in a Baccarat bottle ($550) --Bliss Spa Gift Basket ($50-$200); call 888/243-8825 Kitchen and Home. Among Fiori's suggestions for the domestic sphere are: --Fresh caviar from Caviarteria --Aluminum cultivator from Smith & Hawken ($7) --Magafesa Rapid II 8 quart pressure cooker ($109) --Hurrell's Hollywood Portraits (Abrams, $39.95). Classic clothing and accessories, can have added panache when special attention is paid to choosing unique fabrics or decorations. to bring an imaginative touch to these standards try: --Anything cashmere --Costume Brooches, Art Deco Jewels ($65). With respect to charity; "Giving to a charity of a favorite cause unites friends and family in the true holiday spirit -- thinking of others," states Fiori. She suggests: --A donation to the African Wildlife Foundation (202-939-3333) or the Nature Conservancy (800-628-6860) in a friend's name.
ON-LINE NEWS:
Knight-Ridder, NYT Report Online Losses
Both Knight-Ridder and The New York Times reported tens of millions of dollars in losses for their New Media ventures for 1997 at the Paine Webber Media Conference here in New York. Yet both companies emphasized their optimism that revenues will increase next year, with possible profitability by 2000. Knight-Ridder will spend about $27 million this year on its 32 web sites but will take in only $11 million in revenue, according to chairman P. Anthony Ridder. Outlays for next year probably will be the same if not higher, but revenue also is expected to grow. Meanwhile the Internet is a valuable investment, said Ridder, pointing to his San Jose Mercury News, which has a daily circulation of 287,000 while drawing 1.2 million readers a month to its Web site. Knight-Ridder also is talking with the Tribune Co. and Washington Post about developing their online real estate and auto classified businesses. Knight-Ridder may part in the real estate portion, but Ridder said his company is not interested in becoming the third, full partner in the effort. Ridder said that he was "disappointed" with this year's debut of the New Century Network -- nine major newspapers sharing a common Web site aimed at luring national advertisers online -- and is looking at ways improve the site. Meanwhile, The Times expects a $12 million to $15 million loss for 1997 and an $8 million to $11 million loss next year, when it will launch its New York Today local content Web site and broaden its Boston Globe (http://www.boston.com) site. Despite its red ink, The Times' Web site (http://www.nytimes.com) has nearly 3 million registered users and is growing at the rate of about 200,000 users per month. Source: Mediacentral 12/12/1997
Barnes & Noble, AOL Make Deal
Barnes & Noble on Tuesday said it is paying America Online $40 million to be the exclusive seller of books on the nation's largest online service, shutting out Amazon.com and other major sellers of books on the Internet. Amazon.com, based in Seattle, is not currently promoting its books across America Online's network. But the Barnes & Noble Inc. deal locks up AOL for the next four years and expands where the bookseller can show ads, including the service's financial, travel and entertainment sites, and with its international subscribers.
The deal is the latest this year with America Online Inc., which has staked its future profits on revenues from advertisers. In exchange for helping to promote their products, the Dulles, Va.-based company is receiving more than $225 million from companies including CUC International Inc., a buying club, and Tel-Save Holdings Inc., a seller of long-distance telephone service.
By clicking on the Barnes & Noble icon, AOL's 10 million subscribers can link up to the company's Internet site and order books. "Effectively it gives us great positioning, locks out the competition, and gives us the next four years" of exclusive advertising, Barnes & Noble vice chairman Steve Riggio said. An Amazon.com did not immediately return a phone call seeking comment. America Online declined to comment. Amazon.com continues to sell books over AOL's World Wide Web site. December 16, 1997 By THE ASSOCIATED PRESS
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