Future To Sell US Business 2.0 To Fortune Group
Magazine and internet publishing group, Future Network, is to sell the US edition of its Business 2.0 title to The Fortune Group, a division of AOL Time Warner. The move to dispose of Business 2.0 in the US follows the closure of the European edition after it suffered from a downturn in the business sector advertising market (see Future Closes German Business And European Business 2.0 Editions).
The initial consideration for the sale is $68.0 million (£48.8 million) in cash, plus additional considerations dependent on the division’s financial performance to the end of 2006.
Net proceeds from the disposal of Business 2.0, after taking into account taxation and transaction expenses, are expected to be approximately $48.4 million (£34.7 million). On a pro forma basis net proceeds will be $39.4 million (£26.4 million). This money will be used to fund restructuring costs and repay Future Network’s debt.
Due to its size, the disposal of Business 2.0 is conditional upon shareholders’ approval, which will be sought at an Extraordinary General Meeting. So far, shareholders representing 53.0% of Future have voted in favour of the sale.
The more general picture for Future Network remains ‘challenging’, the company said this morning. Market conditions are difficult in both advertising and copy sales. Nevertheless, PlayStation2 publishing plans remain on track.
Excluding previously announced one-off restructuring items, together with the costs associated with the disposal and trading losses of Business 2.0, Future Network recorded a small EBITA profit in the four months to 30 April 2001.
At 10:00am today shares in Future Network were up 2p at 71½p.
