New Yorker Magazine Gets Offer : Newhouse Bids $122 Million for Rest of Firm’s Stock
New Yorker Magazine Inc., publisher of the quirky leading light of American literary magazines, said Tuesday that it is considering an unsolicited $122-million offer from publisher Samuel I. Newhouse Jr. to purchase the 83% of company stock he does not already own.
The magazine’s board members met in a four-hour session to discuss the $180-a-share offer made Monday by Advance Publications Inc., a holding company for the Newhouse interests. The board then issued a statement saying it would “consider all aspects of the proposal” with the help of attorneys and the New York investment banking firm of First Boston Corp.
Newhouse, whose family interests include Conde Nast magazines and Random House books, purchased 17% of the company’s stock for $25.5 million last November, and a New Yorker spokesman said the offer “came as no surprise.” Industry analysts speculated that Newhouse is interested both in the profit potential and the reputation of the magazine, which has shown off the talents of preeminent American writers for 59 years.
The magazine has attracted those talents in part by allowing them an unusual degree of freedom--including freedom to write without concern for an article’s appeal to mass tastes. In the letter extending the offer, Newhouse tried to reassure the board that the independence would be maintained.
He said that, if the offer were accepted, the magazine would be run on a “stand-alone basis” separate from other Newhouse operations, with no change in its internal departments, “officers, editors, employees and contributors.”
“We recognize that the unique quality of the New Yorker Magazine is the product of its personnel and of their operating practices and traditions, including the tradition of complete editorial independence,” the letter said.
Newhouse was unavailable for comment, as was Peter F. Fleischmann, chairman of the New Yorker and son of magazine founder Raoul Fleischmann. Fleischmann and other members of his family control 32% of the company’s 816,000 outstanding shares.
Fleischmann has worked at the magazine for 30 years, and observers say he is fiercely devoted to the independence of its editorial side from business operations. At the same time, there has been industry speculation for some time that Fleischmann, 63, wants to see the family stake shifted to safe hands before he dies.
George J. Green, for nine years president of New Yorker Magazine Inc., said that Fleischmann “probably thinks the magazine would be safer in his hands than in anybody else’s. But now he’s got to worry about whether the other shareholders will want to jump at that $180-a-share offer.”
William Shawn, the magazine’s editor, declined comment. Roger Angell, a senior fiction editor and contributor, said he does not believe there is “panic among the staff. But there’s uncertainty. Anytime there’s an offer like this, of course there’s reason to wonder what will happen next.”
Angell said he tended to accept Newhouse’s pledge that he would not tinker with the magazine’s editorial side. “(His) saying he wouldn’t change the operation of a magazine that’s been successful in every imaginable way--I tend to believe that,” Angell said.
Some Concern Shown
But some magazine staffers have expressed concern, noting that the Newhouse interests have kept a close eye on profits in their newspaper operations. Many have been disappointed by Conde Nast’s Vanity Fair, a magazine that has been advertised as a literary showcase.
Green, now executive vice president of Hearst Publications in New York, said that over the years offers to buy the magazine have come from CBS Inc., while “every major publisher you can name has at least gone to lunch (with New Yorker officials) to talk about it.”
New Yorker stock, traded over the counter, rose $4 a share Tuesday to a bid price of $176 on trading of 600 shares.
New Yorker Magazine Inc. earned $5.3 million on revenue of $74.7 million in 1983, the last full year for which figures are available. The magazine has a weekly circulation of about 480,000, a figure that has been steady in recent years.
New Yorker Magazine Inc. also owns majority shares in Cook’s magazine and Horticulture magazine, small stakes in several newspaper and book publishing companies, as well as other holdings.
Folio magazine, a magazine-industry trade publication, says the New Yorker is third after Business Week and the New York Times magazine in its total number of advertising pages.
The Newhouse interests, privately held, include 30 newspapers, television, radio stations and cablecasting operations, as well as the magazines. Among the Conde Nast magazines are Vogue, Gourmet, Mademoiselle and Self.
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