Barry Diller’s IAC Looking to Buy Meredith for More Than $2.5 Billion (Report)

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IAC, the digital media holding company headed by Barry Diller, is the leading bidder for Meredith’s magazine and digital businesses, in a potential deal valued at more than $2.5 billion, the Wall Street Journal reported late Thursday.

Meredith’s lifestyle brands, focused on women-skewing audiences, include People, EW, InStyle, Shape, Food & Wine, Better Homes & Gardens, Allrecipes and Parents. The deal would not include Meredith’s local TV business, which Meredith has agreed to to Gray Television for $2.7 billion. IAC has “pulled ahead of another group vying for Meredith,” which includes private-equity firm the Najafi Cos., the WSJ reported.

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Reps for IAC and Meredith declined to comment, both citing policies of not commenting on “rumors or speculation.”

On the report, Meredith’s stock zoomed up 25%, boosting its market capitalization to about $2.3 billion. IAC shares rose 2.5% in morning trading amid a decline among major market indexes.

“In our view, IAC is mainly focused on Meredith’s digital media assets,” which would complement IAC’s Dotdash online publishing business, Cowen analyst John Blackledge wrote in a research note Friday about the unconfirmed report.

Meredith’s digital business generated about $700 million in revenue for the 12 months ended in the second quarter of 2021, and Meredith’s magazine segment generated $1.3 billion in revenue. By comparison, Dotdash generated revenue of $264 million over the same period. “The deal would add significant scale to IAC’s already strong digital media biz,” Blackledge opined.

IAC recently spun off video hosting and publishing division Vimeo, after a similar deal last year spinning off dating-app company Match Group.

“Dotdash has implemented what we view as a best-in-class approach to open-internet monetization of inventory, relying on slimmed-down ad loads and improved page speed to generate organic traffic,” Blackledge wrote, and “there may be potential for revenue synergies at Meredith by implementing aspects of Dotdash’s playbook.”

Meredith, founded in 1902, closed its acquisition of Time Inc. for $1.85 billion (excluding debt) in 2018, financed in part by politically conservative brothers Charles and David Koch. Meredith has since sold off Time magazine (to Salesforce CEO Marc Benioff), as well as Sports Illustrated, Fortune and Money.

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