Wheaton's Ritchie Capital makes bid for Newsweek
Newsweek, the weekly magazine being shopped by Washington Post Co., drew formal interest yesterday from OpenGate Capital LLC, Wheaton-based Ritchie Capital Management LLC Chief Executive Officer Thane Ritchie and Newsmax Media Inc.
OpenGate managing partner Andrew Nikou said in an interview that the private-equity firm submitted a bid. Ritchie confirmed in an e-mail that he had entered paperwork, on his own behalf rather than the firm's. Newsmax Media said in an e-mailed statement it had made an offer.
Washington Post set yesterday at 5 p.m. New York time as a deadline for formal expressions of interest, according to documents sent to prospective buyers. The magazine has lost $44 million on an operating basis since 2007, the documents show.
Print advertising revenue plunged 39 percent to $70.3 million last year from $115.5 million in 2008, the documents show. The magazine took in more revenue from circulation sales last year -- $79.7 million -- than from print ads.
Newsweek lost $2.3 million in the first quarter as revenue slid 31 percent to $29.4 million, according to the documents. Newsweek trimmed expenses by 38 percent in the period to $30.8 million, partly by reducing its guaranteed circulation for advertisers to 1.5 million from 2.6 million.
"If Newsmax Media Inc.'s bid is successful, Newsweek's stellar brand and editorial representation would remain distinct from our other brands," including the Newsmax.com Web site, the West Palm Beach, Florida-based company said in the statement.
Newsmax also owns Newsmax magazine and publishes columns by Ben Stein, Laura Schlessinger and former Bill Clinton pollster Dick Morris, according to its Web site.
Newsweek Editor
OpenGate, with offices in Los Angeles and Paris, bought TV Guide in 2008 for $1. Nikou declined in the interview to discuss the bidding process. Ritchie, who sought last year to buy Sun- Times Media Group Inc., also declined to elaborate.
Frank De Maria, a Newsweek spokesman, declined in an e-mail yesterday to comment on the process. Washington-based Post Co. said last month it had hired Allen & Co. to help it sell the magazine it has owned since 1961.
Newsweek editor Jon Meacham, who previously said he was seeking partners to submit a bid, said in a telephone interview yesterday he was still exploring options for the magazine. He declined to comment on the deadline.
Washington Post shares climbed $5.83 to $470.25 at 10:15 a.m. in New York Stock Exchange composite trading. The shares had gained 5.6 percent this year before today.