The directors of New Yorker Magazine Inc. said Friday that they have voted unanimously to recommend that company shareholders accept publisher Samuel I. Newhouse's offer of $142 million for the 83% of the magazine publisher that he does not already own.
Knowledgeable observers said they expect the shareholders to accept the offer at a meeting next month and thereby add the 60-year-old magazine to a Newhouse stable that includes Vanity Fair, Vogue and Mademoiselle. Newhouse offered $180 a share on Feb. 12, later boosting the offer to $200 a share.
The directors voted after First Boston Corp., the magazine's financial adviser, concluded that the offer was financially "fair," the company said in a statement.
The New Yorker said the merger plan provides that the magazine will operate "on a stand-alone basis" within Newhouse's Advanced Publications Inc. subsidiary, "with continuation of current directors, officer and employees. Advanced intends to preserve the quality of the New Yorker through maintaining its personnel, practices and traditions."
New Yorker Chairman Peter F. Fleischmann, who is the son of the magazine's co-founder and whose family holds 32% of the company's shares, overcame initial reservations about the Newhouse overture, observers close to the company said. Fleischmann has resisted many offers to sell the magazine, in part from a concern that a new owner would change long-established traditions.
"Originally, he may not have thought it was such a good idea," said William J. Reik, managing director of Mitchell Hutchins Asset Management, a unit of the Paine Webber Inc. brokerage firm, which holds a 17% stake in the company for itself and its clients. "But he's a pretty independent thinker, and he voted for it."
"He's decided (the sale) would follow his father's wishes. I'm sure that's lifted a burden," said George J. Green, who resigned as New Yorker president last March.
Fleischmann, Newhouse, New Yorker President J. Kennard Bosee and Editor William Shawn did not return a reporter's phone calls.
With a weekly circulation of 500,746, the magazine earned its reputation as a literary showcase publishing the works of such writers as John O'Hara, E. B. White, Robert Penn Warren, John Updike and John Cheever.
The magazine's circulation and earnings have remained about steady in recent years. In the fiscal year that ended last Dec. 31, the company earned $5.6 million on revenue of $81.4 million. In 1983, the company earned $5.3 million on revenue of $73.7 million.
The company's stock was trading as low as $130 a share last year, noted Mitchell Hutchins' Reik. He said the Newhouse proposal was "a very nice offer for a very nice property" and predicted that the deal would be approved.
Calvin Trillin, a New Yorker writer for 21 years, said there are "almost as many opinions here (about the proposed sale) as there are people at the magazine. . . . Obviously, in an organization with this kind of continuity, people are wary of any kind of change."
Roger Angell, a senior fiction editor and contributor, said he considers approval of the offer "pretty much inevitable."
In addition to the magazine, the New Yorker owns Boulder Enterprise Inc., a Colorado printing company, as well as controlling interests in Horticulture and Cook's magazines.
Advanced, based in Staten Island, owns 29 newspapers, a cable-television system, Parade magazine, Random House and Conde Nast Inc., publisher of nine magazines.