By Joe Sharkey
Staff Reporter of The Wall Street Journal
February 16, 1989
Several of the world’s top publishing companies have made offers to buy the National Enquirer, beginning a bidding contest that could top $400 million and who’s outcome could define a new battleground in the global magazine business.
Executives familiar with the bidding for the family-owned weekly tabloid; based in Lantana, Fl., said Diamandis Communications, the U.S. magazine group of the French publishing giant Hachette SA, has submitted a bid, as has Maxwell Communications Corp., the big British publisher that only last year paid $2.7 billion for Macmillan Inc.
Diamandis confirmed it made a big but Maxwell declined comment.
Time Inc. studied making a bid, according to publishing executives, but it couldn’t be determined whether Time made a formal offer by the close of the initial round of bidding Tuesday. Time wouldn’t comment.
Another rumored potential buyer, Rupert Murdoch’s New Corp., denied it submitted a bid. West Germany publisher Heinrich Bauer also is believed to be in the bidding. Bauer officials couldn’t be reached for comment.
Besides the big publishing companies, two separate groups of employees of National Enquirer’s parent, GP Group Inc., submitted bids, one proposing an employee stock ownership plan (ESOP) buy-out and the other a leveraged buy-out.
But some industry executives said the paper would command a hefty premium because of the solid shelf-space position in racks at the head of supermarket in other cash-register lanes, where most magazines and weekly tabloids that rely on single-copy sales live or die.
Diamandis sells most copies of its Women’s Day magazine in such racks. Bauer is about to launch a new women’s magazine in the U.S. Robert Maxwell, the British press magnate, is believed to be harboring an ambition to publish a weekly newspaper in the U.S. along the lines of the raucous British national weeklies.
The Enquire went on the block after the death last October of its long time publisher, Generoso Pope Jr. One of Mr. Pope’s sons, Paul, is leading the group of employees seeking to buy the paper through the ESOP. Iain Calder, the paper’s editor, who is also chairman of GP Group, is leading the other employee group. Both men declined to comment.
One potential buyer who has since dropped out, Kent Brownridge, senior vice President of Straight Arrow Publishers Inc., which publishes US and Rolling Stone magazines, said the Enquirers major asset is that “it’s a property that is making money and has a great potential to make more money.” But he added that the publications hard-won position in supermarkets and other stores was a major draw.
“You secure that checkout space with money, but once you own it, the battle has begun,” he said “To use it effectively, you have to have a marketing force of people who dress the racks and make sure your magazines are going into those racks.” The Enquirer checker force, he said, “is one of the most formidable” in the industry.