MEDIA: Blu Inc expansion on the cards with MI buy

Blu Inc will pay half of the $5 million in cash and the other half with 8.8 million new shares in Blu Inc (the company is listed on the Singapore Exchange).

In return, MI has provided a profit guarantee of $446,000 for the financial year 2003. The two companies had been negotiating the deal over the past year.

Magazines Incorporated is best known as the publisher of The Peak, a society magazine published in Singapore, with an audited circulation of 13,513. It is also published in Malaysia (where MI also has Marie Claire) and Indonesia; in addition to a book spin-off of this title called People at the Peak, a who's who of Singapore society. The company has a staff of 68 people in Singapore, Malaysia and Indonesia and made a profit last year of $552,000.

According to Blu Inc executive chairman Simon Cheong, the acquisition was particularly attractive because of the guaranteed income and because of what he described as the 'Rolls Royce' of magazines - The Peak.

"The Peak will complement Blu Inc Group's existing collection of predominantly women's and lifestyle magazines. Together with The Peak, Blu Inc Group now offers a wider range of magazines to serve advertisers," he said.

With this latest acquistion, Blu Inc will increase its published titles from 30 to 38.

He added that The Peak was also attractive because the title had been registered in other places such as Hong Kong and Thailand, which meant that the title could expand into these markets: "There is increasing demand and opportunities for such magazines as countries and cities in Asia become more sophisticated and affluent."

Publisher Freddie Tan and general manager Dennis Pua will stay on with the company.

Said Cheong: "The team will continue to manage and grow MI in Singapore, Malaysia and in the region. Freddie, being the key person, will also be a shareholder after receiving Blu Inc shares as part consideration for the acquisition."

As for future plans, Cheong said the company was looking to expand further: "Blu Inc Group will continue to source quality titles like The Peak, either through mergers and acquisition or through alliances to build shareholder value in the media publishing business."