InvestmentNews fortunes sink after buyer 'materially lowers' its $6.5-million bid, but new mystery buyer steps up with $4.1-million offer, including hefty lease deal, Bonhill says
The London, UK owner decribes the buyer as a U.S. media company proposing an all-cash deal that will assume a $1.9-million lease obligation in Manhattan
3 min read- InvestmentNews sale faces uncertainty after initial buyer lowered its $6.5M offer.
- Bonhill Group considers a new $4.1M cash offer, including lease assumption.
- Crain Communications is rumored as the potential buyer seeking InvestmentNews.
- Bonhill forecasts improved InvestmentNews advertising and bookings for Q1 2023.
InvestmentNews has lost a potential suitor who looked under its hood and “materially lowered” its $6.5 million offer, but UK owner Bonhill Group says a new beau is in the wings.
Bonhill Group rejected a revised offer from the buyer, effectively ending a tentative agreement Feb. 6 to buy InvestmentNews for $6.5 million in cash.
The exclusivity period granted to that prospective acquirer was terminated by the London media company, according to a Mar. 10 statement.
Shares of Bonhill dropped to £5 ($6.15US) from £7 ($8.62US) on the news of the lowered offer and has remained at that reduced level.
A second U.S. “media buyer” stepped forward with a $4.1 million deal – all cash – contingent upon a period of due diligence.
How InvestmentNews may become nucleus of U.S.-based roll-up if UK investment banker succeeds with 'wild swim' across Atlantic to purchase it
Crain Communications is quite likely the cash buyer, according to sources. It sold the publication to Bonhill for $27.1 million in 2018.
Bonhill makes no promises it can get the deal done as currently agreed.
“Shareholders are advised that there can be no certainty that any sale or other transaction will be concluded for InvestmentNews, nor as to the terms on which any sale or other transaction may be made,” its disclosure reads.
Vacant space
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The deal is worth more than $4.1 million to Bonhill because the proposed buyer has agreed to assume InvestmentNews' lease obligations until January 2028 on its offices at 685 3rd Avenue in New York City.
InvestmentNews pays about $31,000 in monthly rent or an estimated $1.9 million over the five years remaining. The 31-story building, built in 1960, consists of 639,000 square feet and is beset by large vacancies on several floors.
The British parent of InvestmentNews got a $2.4 million federal taxpayer bailout to weather the pandemic crash and has been freed from paying back the money under a COVID relief program
Crain has long maintained leases in the same 3rd Ave. building where two of its publications, Crain's New York and Pensions & Investments, were co-located.
That due diligence may include a peek at first quarter revenues and cash flow after a COVID lockdown, all but ended its event business, causing the company to bleed cash – the red ink carried on through 2022.
It survived in part on federal PPP bailout loans of $2.4 million. See: The British parent of InvestmentNews got a $2.4 million federal taxpayer bailout to weather the pandemic crash and has been freed from paying back the money under a COVID relief program
Bonhill forecasts
Bonhill forecasts improved advertising in the first quarter of 2023 -- up 31% year-over-year -- the company confirmed in its latest LSE filing.
InvestmentNews' bookings are up 57%, and its UK business's bookings are up 16%, the firm noted.
Bonhill will apparently book a loss on the separate sale of InvestmentNews, which a source values at roughly $11 million. See: InvestmentNews is again for sale as 'huge gamble' bleeds more cash in 2022.
But the wider company's high cash burn -- and a 2020-21 COVID-driven slump in the events business -- prompted the current firesale.
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