Goldman Sachs plans UK publishing powerhouse
LONDON - Investment bank Goldman Sachs could be planning to build a £500m UK publishing powerhouse by acquiring smaller publishers after it emerged that the finance giant is planning a similar offensive in the US.
Weekend reports indicate that the US finance giant has already approached a number of senior publishing executives about running the firm, which could emerge as early as July.
The names Goldman Sachs is thought to have sounded out about the proposals include Time Inc CEO Don Logan, Conde Nast CEO Steve Florio and Hearst Magazine president Cathleen Black.
It is believed to have set aside £700m for acquisitions, although if other banks join in the money available could hit £3bn.
Although Sachs has had little or no experience in the publishing sector, it is said to be confident that it is able to read a balance sheet and run a financially tight publishing operation better than some of the big publishing groups.
It is thought to be keen to take advantage of weaknesses it has spotted in the UK publishing sector, while taking on stalwarts such as Emap and IPC Media, which it believes are vulnerable in the current market place.
The bank has watched Emap's situation, which is seen as a takeover target. Emap is struggling to recuperate the money it lost after it sold its US publishing arm for more than £350m less than it bought it for.
However, Sachs's ambitions are thought to be purely financial and it is thought that the Emap USA fiasco is what may have spurred Sachs into coming up with the plan.
Back in 1996, rival US banker Willis, Stein & Partners bought Peterson Publishing for £465m, and sold it on to Emap for at least $1.2bn three years later.
Speculation is that Sachs could begin by acquiring some of the UK's 30 investment and share tipping magazines, which would benefit from increased distribution among staff at Sachs institutions. Increased circulation would allow these titles to hike up their advertising rates.
Sachs is also thought to be considering publishing firms with strong identities such as I Feel Good Publishing, which is run by former Loaded editor James Brown. IFG is expected to launch a new men's magazine tipped to turn around the fortunes of the ailing men's publishing sector.
Sachs was linked to a plan to break up Emap at the beginning of last year, which valued a separated Emap at as much as £3bn.
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