Chas. Levy Abandons Plans to Buy Unimag

Folio: The Magazine for Magazine Management, July 1, 1999 by Mary Harvey

After weeks of delay and controversy, Chas. Levy Co.'s deal to acquire United Magazine Co. and create the nation's second-largest magazine wholesaler has been terminated, say executives from both companies.

"We were extremely disappointed," says Beth Corvino, vice president and general counsel for Chicago-based Chas. Levy. "We wanted very much to be able to close the deal, but we felt we had no choice but to make the decision to terminate it."

Corvino would not comment on specifics of the termination, saying only, "The company determined that conditions that had to be present in order for us to close the deal were not going to be met."

Industry observers speculate that these conditions are connected to an ongoing controversy surrounding an April decision by Kroger Co., the Cincinnati-based supermarket giant, to move some of Unimag's business to two of its top competitors: Anderson News LLC in the Cincinnati area and The News Group in the Detroit area. Sources have said the decision was influenced by Unimag's growing number of unpaid bills from national distributors.