Martha Stewart Living Omnimedia Repurchases 1.37 Million Shares at $23.79 and Enters into Long-Term Strategic Agreement With Time Inc.
Time Inc. Retains 1.22 Million Shares or Approximately
Half of Their Interest in MSO
NEW YORK, Feb. 24 /PRNewswire/ -- Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced that it has agreed to repurchase from Time Inc., a wholly-owned subsidiary of Time Warner Inc. (NYSE: TWX), 1.366 million shares of its common stock at a purchase price of $23.79 per share for a total consideration of $32.5 million. MSO has also announced that, as part of the transaction, it entered into a long-term strategic agreement with Time Inc. As part of the relationship, Time Inc. has agreed to extend the term of its magazine distribution, fulfillment and services agreements with MSO for an additional three years, enter into new promotional print and new media advertising agreements and continue to hold MSO shares for approximately three years. As anticipated at the time of MSO's initial public offering, MSO will finance the share repurchase with a portion of the proceeds from the IPO. "I am thrilled to be able to broaden our strategic relationship with Time Inc. and Time-Warner. They have been a big supporter of Martha Stewart Living Omnimedia since the beginning of the magazine and I am happy that they will remain a significant partner and investor in MSO," said Martha Stewart, Chairman and Chief Executive Officer of MSO. "Martha and her team deserve a great deal of credit for building a significant and vibrant franchise. We're delighted to continue our association with them as both a business partner and investor," said Don Logan, Chairman and CEO of Time Inc. Under the terms of the new strategic partnership, MSO and Time Inc. agreed to: -- Enter into a comprehensive print advertising agreement through which MSO will run ads for its products in Time Inc. publications through 2004. -- Enter into a broad new media advertising agreement through which MSO will advertise on Time Inc.'s web sites through 2004. -- Extend MSO's optional renewals on its agreement with Time Distribution Services, which provides newsstand distribution services for MSO magazines, through December 2007. -- Extend MSO's optional renewals on its agreement with Time Customer Service, which provides fulfillment and customer service for MSO magazines, through December 2008. Additionally, Time Inc.'s put and call rights relating to its MSO equity (as described in MSO's initial public offering prospectus) have terminated. Martha Stewart Living Omnimedia, Inc., is a multimedia company consisting of four business segments. The company's Publishing segment includes the magazine Martha Stewart Living; the quarterly magazine Martha Stewart Weddings; books written by Martha Stewart and the editors of Martha Stewart Living; the syndicated "askMartha" newspaper columns and the Westwood One syndicated radio show "askMartha." The Television segment includes a nationally syndicated, daily one-hour television program, Martha Stewart Living; a daily cable television program, From Martha's Kitchen, on the Food Network; weekly appearances on CBS News' The Early Show broadcast, and periodic CBS network primetime television specials. The Merchandising segment includes strategic merchandising and distribution partnerships with Kmart, Sherwin-Williams, P/Kaufmann and Zellers. Martha Stewart Living Omnimedia, Inc. also has an Internet/Direct Commerce segment that includes an Internet site, http://www.marthastewart.com, and an on-line store and mail-order catalog, "Martha by Mail." Martha Stewart Living Omnimedia, Inc. is listed on the New York Stock Exchange under the ticker symbol MSO. This press release contains certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of terminology such as "may," "will," "should," "could," "expects," "estimated," "plans," and "intends." MSO's actual results may differ materially from those projected in these statements, and factors that could cause such differences include declines in consumer spending, increased competition in e-commerce, general economic conditions and government regulations. These and other factors are discussed in more detail in MSO's filings with the SEC, copies of which may be accessed through the SEC's World Wide Web at http://www.sec.gov.
SOURCE Martha Stewart Living Omnimedia
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