Sources: VNU May Soon Announce New CEO, Corporate Restructuring
ﾷ The naming of a replacement for former CEO Rob van den Bergh, who stepped down from his post during the company’s annual meeting last month.
ﾷ A restructuring of management at U.S.-based VNU Business Media. Sources say VNU Business Media CEO
Michael Marchesano may be asked to play a bigger role in the company’s corporate structure.
Though a decision is still months away, sources say VNU may consider putting its European division up for sale and may eventually sell off some of its non-core U.S.-based magazine holdings.
Shareholders approved Friday the company’s conversion to a privately held corporation. The company’s new owners began de-listing VNU’s shares almost immediately after purchasing the company in June for $9.7 million.
One source says Valcon has waited more than a month after its take-over of the company to name a new CEO for good reason. "There were two main reasons I felt that a CEO hadn’t been identified publicly — first, we all believed that the incoming CEO was someone employed elsewhere at the top levels of management," said Michael Alcamo, president of investment bank, M.C. Alcamo & Co. "Given that the bidding group needed 95 percent shareholder approval, that potential CEO couldn’t announce that he or she was leaving before it was clear that the bidders had the necessary 95 percent votes."
Alcamo says that directors’ duties in Dutch companies usually extend beyond shareholders to all stakeholders. "I suspect that Dutch law requires directors to consider the impact of their action on employees, creditors, and the Dutch community in general in some way," he said. "The bidding group therefore could not state that they planned to restructure the company or reduce headcount and have any hope of getting supervisory board approval, much less a 95 percent shareholder vote."
One source, who spoke on the condition of anonymity, believes the company will not sell its magazines right away. "Although they’ve suffered like a lot of other publications, overall it’s a good business," said the source. Under the terms of the sales contract, VNU wouldn’t be able to sell the magazines for at least 18 months, the source explained. "And they wouldn’t want to because the tax implications would be onerous," the source added.
Alcamo said some of the division’s publications may be sold or spun off, once the year-and-a-half waiting period is over. "It has always been anticipated that the private equity buyers wanted to get their hands on A.C. Nielsen," he said. "We always thought the buyers viewed the rest of the company as ancillary and that those other assets (would) be sold or spun off to shareholders. The publishing assets range from Kitchen and Bath Business to Billboard magazine, and I am guessing that one day we will hear that ‘non-core assets’ will be spun off or sold to other private equity buyers."
The Netherlands-based media company has been purchased by a consortium of private equity firms called Valcon Acquisition B.V. To date, Valcon has replaced all but one member of the company’s Board of Directors with executives from the firms that purchased the company, and said goodbye to van den Bergh. Van den Bergh was replaced by Chief Financial Officer Rob Ruijter, who is holding both the CEO and CFO positions in the interim.
U.S.-based VNU Business Media currently publishes 45 business publications, including Adweek, Billboard and Editor & Publisher magazines; 17 directories, stages 70 events and conferences and 65 trade shows, and operates 165 eMedia products (e-newsletters and Web sites). VNU’s business information division had 2005 revenues of about $618 million and EBITDA of $109 million. Bill Mickey Contributed to this Story .