Politico owner eyeing $1bn in deal with German publishing giant Axel Springer
The owner of news site Politico is reportedly looking to rally as much as $1bn in a potential deal with the German publishing giant Axel Springer.
The talks with Axel, led by its owner Robert Allbritton, have circled a potential investment or an outright sale, the New York Times first reported.
The deal would gift a lofty premium for Politico, which generates some $200m a year in revenue, two people familiar with the matter said. However, a figure is yet to be tabled.
In what would be one of the priciest media mergers in recent years, the $1bn deal would equate to five times Politico’s yearly sales.
It follows BuzzFeed confirming its plans to go public in June, which bumped its valuation up to $1.5bn, or about three times its annual revenue.
The German publishing house had been mulling media opportunities in the US after snapping up Business Insider for about $500m in 2015. The firm also acquired a controlling stake in newsletter publisher Morning Brew.
Axel and Politico have already worked together as joint owners of Politico Europe. But the publishing giant cannot expand the business with Allbritton’s consent as it does not fully own the news outlet.
Though a deal with Politico could solve that issue while also expanding Axel’s presence in the US, the sources said.
The merger could scupper Axel’s talks with news rival Axios – but those at the helm of the news site are yet to be overly excited by the deal, one source added.
The sources explained that Allbritton had the opportunity to sell off Politico to Axel several years ago, during its earlier days, Allbritton did not want to do so at that time.
Allbritton’s patience, however, could have landed the news site a hefty payday, if the talks enter more advanced stages.
Axel declined to comment when approached by City PM