Omnimedia explores ventures with private equity

By Jeffrey Goldfarb

NEW YORK (Reuters) - Martha Stewart Living Omnimedia Inc. (MSO.N: Quote, Profile, Research, Stock Buzz) has explored buying magazines and Internet companies in partnership with private equity firms, but is not interested in going private itself, company executives said on Thursday.

"There's a lot about being a public company that's pretty nice," Chief Executive Susan Lyne said at the Reuters Media Summit in New York. "We are not beholden to a private equity internal rate of return (IRR). We have a great board; we can set our own direction."

Private equity firms have had a huge appetite for media companies over the past year, snapping up radio giant Clear Channel Communications Inc. (CCU.N: Quote, Profile, Research, Stock Buzz), Spanish-language broadcaster Univision Communications Inc. UVN.N and VNU, the world's biggest market research company, among others.

"I think if you really look at our company, where it's going right now, there aren't the drivers that would push a company to want to go private that you might see with a lot of other companies," Lyne said.

Martha Stewart Living, the New York-based publishing and merchandising company founded by lifestyle magnate Martha Stewart, has nevertheless held talks with private equity firms about possible joint ventures.

"We've spoken to a lot of private equity companies, but when we speak to them it's more about let's partner," Chief Financial Officer Howard Hochhauser said. "We have great management and great content; they have money. Let's marry the two and let's see what we can do together."

Added Lyne: "It could be anything from small Internet companies that have an application or a user base that we think would be accretive, or another brand that we think we could do for that brand what we've done with our core brand."

A joint deal with private equity could also be to buy magazines, Hochhauser said.

"We've looked at a lot of businesses," he said. "It comes down to Susan's point about IRR. We're disciplined with respect to our returns as are private equity companies."

As part of a 2006 settlement agreement with securities regulators over civil insider-trading charges, Stewart was barred from serving as a chief executive or director of any public company for five years.

When asked if the company would go private so that Stewart could regain her role, Lyne said she believes that the CEO job is "not a driving issue" for Stewart at the moment. Lyne said Stewart is "fully engaged" in her current role with the lifestyle company she built from a small catering firm.

(For more coverage of the Reuters Media Summit, please see our MediaFile blog at blogs.reuters.com/mediafile)