AOL Time Warner shows interest in buying IPC Magazines

AOL Time Warner, the US media giant, is interested in buying IPC Magazines, the publisher of Woman's Own and Loaded lifestyle titles.

The US company has held talks with IPC, which was acquired in 1998 from Reed Elsevier by management, backed by the venture capitalists Cinven, for £860m.

The move would follow Time Warner's purchase last week of Business 2.0, the e-commerce journal, from its British publisher, Future Network, for £49m. Cinven has a 56 per cent stake in IPC and has said it wanted to exit in three to five years from the buyout.

Analysts said with the new- issues market now effectively closed to the likes of IPC, a trade sale was its only hope of divestment. IPC management, led by chief executive Sly Bailey, holds 10 per cent.

An industry source said: "Time approached IPC some months ago. There have been on-and-off discussions since then, but they are not currently going on."

It is not thought that a deal is imminent, partly because of differences over price. In the 1998 buyout, Cinven is widely thought to have overpaid for IPC. And, against a rapidly weakening advertising market, a transaction is expected at little more than the buyout price ­ some analysts have estimated IPC's worth at just £750m. A spokesman for IPC refused to comment on any possible takeover but said the company was bucking the bearish trend in advertising. Last month, IPC forecast that advertising revenue growth would slow to 5-6 per cent this year, from 8 per cent in the previous 12 months. For the half-year to March, pre-tax profits were £3.8m on turnover of £3.8m.

Over the past 18 months, there has been a management shake-up at IPC. Under-performing titles, such as Melody Maker and Nova, have been closed.

In the past, there has been speculation that Telewest, the cable group, or rival magazine publisher Emap could make an offer for IPC, but both are seen as unlikely candidates.

Time, which declined to comment yesterday, is known to be looking to expand abroad in publishing, partly by acquiring magazines.