With the troops getting restless for news on a deal, Forbes Media Chairman Steve Forbes, for the first time, told employees he will definitely keep a minority stake in the company after it is sold.
He made the announcement at a quarterly company-wide town hall meeting on March 13.
One insider said the impression he gave is that it was “only Steve” — and not other family members — who would be staying with the new owner.
“He was pretty adamant,” said one source, “he said, ‘I am going to be involved with the new owner.’”
Forbes also confided that several potential suitors who wanted to do a deal without him were rejected early on. It casts some new light on the selling process, since it now appears Steve
Forbes wanted to stay involved from the get-go.
But he still did not identify the winning bidder. “That was pretty irritating,” said the source, although Steve Forbes promised staffers there would be news “shortly.”
It has been reported that Fosun International, a diversified Chinese company, is the lead bidder with a $250 million offer on the table.
If the deal is finalized, it would be controversial because it would be the first purchase of a Western media outlet by a Chinese company.
One English-language Chinese paper, The Global Times, seemed fearful of a backlash already and recently published an op-ed piece urging Washington lawmakers not to object since a sale would be a way to boost Sino-US relations.
“Washington should demonstrate its commitment to free trade and allow the sale to proceed, which could ultimately help to build trust in the US-China relationship if Fosun shows it can respect Western publishing standards and reverse Forbes’ declining performance,” said the opinion piece that appeared in the Global Times on Feb. 27.
Interestingly, Washington lawmakers so far seem largely silent on the merits of the deal.
In reality, people speculate that the slow pace of negotiations is not tied to objections from Washington but to complications involving a non-traditional media company based on the other side of the world — and to a family-controlled entity where one member wants to stay on board.
Steve, three brothers, Timothy, Robert and Christopher, and a sister, Moira, gained control of the company when their father, Malcolm Forbes, died in 1990.
Steve became the majority stockholder.
Elevation Partners appeared on the scene in 2006 to buy 40 percent of the company. That deal gave Elevation preferred stock — now worth about $270 million, according to estimates — that must be paid back before any Forbes family payout.
So if Steve is going into the new deal alone, as it appears, it means he’d have to come to terms with his four siblings — and their extended families, now believed to number about 50 — over how to buy them out of their stakes.
In one indication the family may be getting ready for post-sale life, Miguel Forbes, the adopted son of Robert, left the company shortly after the pending sale was announced in November. He had been president of worldwide development.
When CEO Mike Perlis first broke the news that the company was going on the block in November, he urged employees to have patience and told them not to expect anything before mid-to-late February.
While it was never a hard-and-fast deadline, it is now a month past that date, and the inevitable speculation over whether negotiations have hit a snag has begun to bubble up.
A Forbes spokeswoman, while declining to reveal anything on the identity of a suitor, said, “The process is ongoing.”