$525m Aussie icon sold for $50m
German publishing giant Bauer Media will make a spectacular exit from Australia after eight turbulent years, offloading its local magazine division to a private equity firm.
A deal was struck last night for Mercury Capital to acquire the portfolio of magazines, including iconic titles The Australian Women's Weekly, New Idea and Woman's Day.
It's understood on-again, off-again negotiations have been under way for several months.
Bauer Media entered the market in 2012 with the mammoth purchase of ACP Magazines, formerly owned by the Packer family, for $525 million.
The Australian Financial Review reports today that the Mercury deal is worth less than $50 million.
Neither party has commented on the purchase price. The deal is due to be finalised in July.
"We have been proud to be the custodian of these iconic titles in Australia. I am confident that under Mercury's ownership they will continue to thrive," Veit Dengler, Bauer Media group chief operating officer, said.
And speculation in The Australian today is that the entire Bauer business is now valued in the "tens of millions of dollars" following years of tumbling advertising revenue and shrinking circulation.
Mercury's acquisition comes just months after Bauer finalised its $40 million purchase of Pacific Magazines from Seven West Media, which was negotiated before the coronavirus crisis.
Reports emerged earlier this year that Bauer was trying to get out of the transaction, which suddenly made much less commercial sense, but was legally bound to the contract.
Industry coverage of the Mercury deal today cites unnamed sources as saying the private equity fund is optimistic about the publisher's digital expansion potential.
But the general outlook for magazines is grim.
Last year, professional services consultancy PwC described the "scale and frequency of titles (as being) unsustainable in an era of ubiquitous access to similar content at zero cost".
Bauer, a family run, Hamburg-based publishing empire, has presided over the shuttering of multiple well-known Aussie titles, including Cleo, Cosmopolitan, Dolly and Men's Style.
The shrinking landscape has resulted in hundreds of job losses and the complete closure of Bauer's New Zealand operations.
Earlier this year, it suspended the printing of a handful of titles, such as NW and OK!, which have not resumed.
Hundreds of positions were also slashed at Pacific Magazines as a result of the merger.
That's despite chief executive Brendon Hill insisting in October when the deal was signed that all editorial staff would come across.
Media Week magazine reports that Hill will continue to lead the company in the interim.
Mercury Group declined to comment and Bauer's representative did not respond to a request for comment.
Originally published as $525m Aussie icon sold for $50m