British Publisher Buys Peterson Cos.

12/15/98

Peterson's press release.

NEW YORK (AP) -- British publisher Emap PLC is buying The Petersen Companies Inc., the publisher of Snowboarder, Skateboarder, Powder, Surfer, Hot Rod, Teen, Sport and other specialty magazines, for $1.2 billion in cash.

The deal announced today will create one of the world's biggest magazine publishers with more than 360 magazine titles, combined revenue of $1.5 billion and more than 6,000 employees.

Emap chief executive Kevin Hand said Petersen gives a position in the U.S. magazine market that can be ``used as a launch pad'' for Emap titles.

Emap, based in London, publishes more than 130 consumer magazines in Europe including FHM, Bliss, Smash Hits, New Woman, Car and Motorcycle News. It also publishes 72 trade magazines such as Nursing Times and Construction News and owns 18 radio stations in Britain.

It had revenue of $1.3 billion in the year ended March 31, 1998, mostly from its operations in the United Kingdom and France.

Emap will pay $34 a share in cash for each Petersen share. Petersen shares rose $2.18 3/4 to $33.50 in morning trading on the New York Stock Exchange today, after soaring 33 percent Monday when the companies each released statements saying they were in talks.

Willis Stein & Partners, a Chicago-based investment firm and the largest shareholder in Petersen, and key Petersen managers are voting for the deal. They collectively control 66 percent of Petersen's Class A shares and all of its Class B shares.

Petersen, with offices in New York and Los Angeles, was founded in 1948 by Robert E. Petersen with the launch of Hot Rod magazine. It now publishes 132 titles.

An investment group led by Willis Stein & Partners, James S. Dunning Jr. and Petersen management acquired the company from Petersen in 1996. The company has since launched or acquired 60 magazines, and went public in October 1997.

Petersen's other titles include Slam, Skin Diver, Motor Trend, Photographic and Motorcyclist. The company also produces trade shows and other events such as the Gravity Games -- an extreme-sports competition that will be broadcast on NBC next fall.

Petersen had revenue of $228.7 million in the 12 months ended Sept. 30.

Dunning, who is now chairman, president and chief executive of Petersen, will remain as chairman and chief executive of the Petersen division at Emap and is expected to be invited to join the Emap board.

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