AOL Time Warner, the world's biggest media group, is moving closer to buying UK magazine publisher IPC Media in a deal worth more than £1 billion, industry sources said today.
In what would be its first big European acquisition since its own merger, AOL Time Warner could reach a deal with IPC next week after a long period of on-off talks with the magazine group owned by venture capital firm Cinven.
Industry sources said Cinven was pushing hard to lift the price toward £1.3 billion but AOL Time Warner does not want to yield too much ground in what is expected to be the first of many acquisitions in Europe.
"Cinven have put around £1 billion into IPC and since their equity is so small, the return-on-equity changes dramatically with every small increase over one billion pounds," one source said. "For Time Warner, this is small change."
IPC and Cinven declined to comment. AOL Time Warner Europe was not immediately available to comment.
The Financial Timesreported today the two firms were negotiating a price of between £1.1 billion and £1.25 billion, with senior executives expected to meet next Thursday to make a final decision.