Sidney Harman, a man who has made a fortune over the past 50 years selling stereo equipment, is nearing a deal to buy Newsweek, the financially troubled magazine, owned by the Washington Post.
The founder of Harman International Industries, Harman has emerged as the Post’s favorite bidder for the magazine, according the WSJ, NYTimes and others. The seller reportedly likes that Harman, who retired as CEO of the stereo maker three years ago, has no plans for deep staff cuts or to alter the magazine’s general editorial direction. No word yet on price.
Here is a dossier on Harman:
Age: 91
Married to: Jane Harman, Democratic congresswoman who represents a district that includes much of Los Angeles.
Money Quotes:
About living long: “My own longevity and that of others I know emits from an erotic love affair with life. The vast majority of people wake up somehow determined to get through the day. This is not a stimulating prospect. I believe the way to get out of bed is with a leap and to hold the conviction that each day is going to be the greatest day of my life.”
About the golf swing: “It reduces complexity to something sublime.”
About writing: “It enables the process of self discovery. I read to learn, I write to discover what I know.”
Fortune: Sidney doesn’t make the Forbes or Fortune billionaire list, so his net worth is difficult to quantify. His wife is often cited as one of the richest members of Congress with a fortune estimated at $112 million in 2009.
Nicest thing someone has said about him: “Sidney Harman is that rare phenomenon in American life —the titan of industry who is also a titan of humanity – the late NPR newsman Daniel Schorr.
First product: World’s first stereo radio receiver, which his company started selling in 1958
Company’s Highest Stock Price: $121-a-share in April, 2007
Lowest Stock Price: February 2009: $10.53-a-share
Biggest Deal He Almost Did: In 2007, Buyout shop Kohlberg Kravis Roberts & Co. and Goldman Sachs’ private equity arm were lined up to take over Harman International in a $8 billion deal. The buyers scuttled their acquisition at the last minute, citing a decline in the business. At the time, the junk bond market had slowed and the credit crisis was gaining steam.
Best Consoliation Prize: Goldman and KKR agreed to acquire $400 million in Harman’s convertible debt in lieu of the take over deal. The conversion rate was $104-a-share, but Harman’s stock never recovered when it plunged to $85, the day the takeover deal was scuttled. It now trades at about $32-a-share.
But that’s been cleverly avoided. KKR and Goldman have agreed to buy about $400 million in Harman’s convertible debt. The conversion rate is $104, which means that there is hope that the stock will make a comeback (the current stock price is about $86).
More importantly, KKR and Goldman will avoid paying a $225 million break-up fee.
Hobby: Golf (He likes to walk the entire course)
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