Is Time Inc. CEO's move another sign of spin-off plans?

Time Inc. CEO Ann Moore has extended her reign at the world's largest magazine company for another three years, signing a contract extension that will carry her through 2012, reports the New York Post's Keith Kelly. It's a small bit of continuity for a company whose future is very much up in the air these days, with many observers predicting that corporate parent Time Warner (TWX) will spin off or sell the publishing unit, which lost $32 million in the most recent quarter. (Time Warner also owns DailyFinance parent AOL, although it recently disclosed plans for a spin-off.)

Does the decision to re-up Moore, who's been in the job since 2002, give any hint as to Time Warner chairman Jeff Bewkes's plans for Time Inc.? While not necessarily evidence that a spin-off is on the way, analysts say it is consistent with that scenario, which they consider a strong likelihood.
"They've gotta either spin it off or sell it, and there are no buyers for it, so it's got to be spun off," says Mark Edmiston, managing director of AdMedia Partners.

Reed Phillips, managing partner at DeSilva & Phillips, agrees, though with a qualification. "It depends on what their horizon is," he says. "A spin-off is the most likely outcome in the next year or the next six months." After that, he says, the M&A environment should be sufficiently recovered that a sale will be possible.

Keeping Time Inc.'s current leadership in place gives Time Warner extra flexibility to choose between those courses of action, says Mike Vorhaus, president of Magid Advisors. "I think if anything this is probably a reflection that they're going to give themselves time to do this," he says. "It probably has to do with when they think they can get a fair price."

Phillips believes renewing Moore's contract may be less telling than another executive move Time Inc. made this week: reassigning senior vice president John Squires, who had been running the news and business group (which includes Time and Fortune magazines), "to develop a strategy for the portable digital world and to refine our views on paid content."

"That's exactly what a buyer will be focused on," says Phillips. "That's probably the most important thing they'll be looking at."

Edmiston, meanwhile, suspects that Moore may not serve out her full term if the spin-off he expects comes to pass. "If I were spinning it off, I'd want to have somebody in there with experience running a public company," he says. "Ann doesn't have that. She's always been a division head."

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum