Forbes will likely soon be under new management as Luminar Technologies CEO Austin Russell and some heavy-hitting foreign investors place a $656 million bid.
- The American CEO of electric vehicle tech company Luminar Technologies has committed only $10 million to a bid to purchase 82% of Forbes—which publishes its flagship business magazine, plus nearly a dozen newsletters, global events, books, and other business-related content platforms.
- Foreign investors will finance the rest of the $656 million bid, Axios reports.
- A deal to buy Forbes was announced last Friday, but the amount foreign investors are contributing is not clear.
- Russell as the face of the deal could help Forbes get the agreement past U.S. regulators, even though foreign investors primarily fund the deal.
- Foreign investors buying a stake in U.S. media companies is not unusual, but structuring the deal so that it appears a U.S. investor is the buyer is not typical.
Why it’s news
In an announcement Friday, the mega business-media company shared that it would be purchased in a $656 million deal. Forbes’s announcement suggested that Russell would acquire an 82% stake in the company, however, his contribution is relatively minor compared to the overall deal.
Russell is reportedly negotiating with India’s investment firm Sun Group, a Silicon Valley investment firm GSV, and other unnamed firms to finance his portion of the deal, Axios reports.
Sources told Axios that some of the partners in the investment group include:
- Kenyan businessman Julius Mwale, who will contribute tens of millions of dollars.
- Silicon Valley-based investment firm GSV is helping bring investors but does not plan to invest itself.
- India-based Sun Group plans to invest around $200 million to $300 million.
- Hong Kong-based Integrated Whale Media (IWM) will have an 8% stake in the company valued at $800 million.
Kazakhstani businessman Bulat Utemuratov was also reportedly in talks to contribute $50 million to the purchase, but a Utemuratov spokesman now says that the businessman is no longer involved in the deal, Axios reports.
However, sources told Axios that the agreement may have been a test to judge media and government reactions to the news. Russell has six months to collect the agreed-upon funding. If either side walks away from the agreement, there is a $35 million breakup fee.
Earlier this year, Forbes nearly sold to a group of investors led by Khemka and GSV. However, the group of investors distanced itself from the Sun Group out of concern for regulatory pushback.