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. Last Updated: 07/27/2016

VNU to Shed Magazine Division

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Independent Media, the parent company of The Moscow Times, is likely to get a new major shareholder. The Dutch media giant VNU is selling its magazine-publishing division, of which its 35 percent stake in Independent Media is a small part.

VNU is shedding its magazine businesses throughout Europe as part of its strategy to focus on the professional information market, which includes directories.

The possible sale of VNU's magazine-publishing division was first reported in October. Official confirmation from VNU came in December.

On Dec. 18, VNU announced a definitive merger with the ACNielsen media-rating agency and said it would fund the deal by exploring the sale of its Consumer and Educational Information groups. The 35 percent stake in Independent Media falls into the Consumer Information Group, whose 2000 revenues are estimated to reach 835 million euros. VNU sold its newspaper division in 1999 while in the earlier stages of acquiring ACNielson.

Maarten Schikker, the director of corporate communications for VNU, said VNU is selling its magazine division to raise money for the ACNielson deal. VNU also realized it would not be able to maintain its desired market position in all segments of the market, he said.

"So we made a choice. Our priorities are marketing information, business information and directories, or Yellow Pages," Schikker said in a telephone interview Thursday.

"The sale has nothing to do with the results of our Consumer Information business, including Independent Media," he said. "In fact, we are very satisfied with the results."

VNU has not set a deadline for the sale. "The most important fact is that we want to sell our Consumer Information business as a whole. It is important that it includes all our activities not only in the Netherlands but also in Belgium, in the U.K., Hungary, the Czech Republic, Slovakia, Romania as well as our interest in Independent Media," Schikker said.

For Independent Media, this means the 35 percent stake will be transferred to another major publishing group.

"Pretty much the only candidates for the purchase are international publishing groups," said Independent Media CEO Derk Sauer. "There are probably about five or six groups in the world that can afford this kind of deal. It is completely out of the question that a Russian company could buy this group," he said.

However, if for some reason Independent Media objects to the policies or market strategies of a new shareholder, it has the option of buying back its stake, Sauer said, adding that the company has the money to do this if necessary.

'It is completely out of the question that a Russian company could buy this group.'

Derk Sauer

"We will just see who the new owner will be," he said. "We will talk to them to establish what their plans are for Russia. If we continue the same way we are running business now, then all is fine, or we can buy our shares back."

VNU's plans to sell its international magazine division were reported this week by two allied newspapers — The Russia Journal and Vremya Novostei — with a number of factual errors. Some were sloppy reporting, such as Vremya Novostei calling VNU a Danish company.

Others seemed intentionally designed to mislead, such as The Russia Journal saying that VNU was selling its stake not as part of a wider strategy but because it had lost confidence in Sauer and Independent Media. The English-language weekly implied The Moscow Times was having financial difficulties and was coming under pressure from the Kremlin.

Sauer countered by saying the company as a whole had a profitable year in 2000, while losses encountered by The Moscow Times were minor and no reason for concern.

He also denied the paper was having any political difficulties. "All of it is because we moved the newspaper to another office," Sauer said. "And the true reason behind the move was: We wanted to have another office."

The newspaper moved over the New Year's holidays from Ulitsa Pravdy to the Independent Media main offices on Vyborgskaya Ulitsa.

VNU joined Independent Media's list of shareholders in late 1997. Apart from The Moscow Times, Independent Media also publishes a range of Russian versions of glossy magazines including Cosmopolitan, Playboy, Men's Health, Good Housekeeping, Marie Claire and Harper's Bazaar. The publishing house also has its own magazines: Bikini, Kto, Yes! and Kult Lichnostei. The Vedomosti daily is a Russian-language business newspaper published in co-operation with The Wall Street Journal and the Financial Times. Independent Media also operates two Internet portals: Business.ru and eStart.ru.