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CMP may be sold by next quarter

A proposed sale of the technology trade publisher is expected to close by next quarter, according to people close to the deal.

CMP Media's efforts to find a buyer for its high-tech publishing business are moving forward and a deal may close by next quarter, according to people close to the negotiations.

The company and its investment bankers have narrowed the field of interested buyers to a small group of serious candidates, said Lazard Freres managing director Peter Ezersky, who is representing CMP.

CMP initially solicited bids from a wide range of potential buyers, and received "more than a dozen" tentative offers. Based on those early proposals, the company now has entered more serious negotiations with just a few potential partners, Ezersky said.

Ezersky said the companies now in the second round of talks are predominantly media and publishing firms, but also include financial companies. A deal is likely to close in the second quarter of this year, he added.

Ziff-Davis and IDG, the No. 1 and No. 2 U.S. technology publishers, were reportedly among those companies initially interested in reviewing CMP's books with an eye toward a possible bid.

Dutch publisher VNU, which owns a huge range of international trade magazines, also has indicated its interest in the company.

The Manhassett, New York-based technology trade publisher announced early last month that it was opening a search for a buyer or other strategic partner, after 27 years as an independent, family-controlled company.

The company has had a rough year. Advertising revenue has fallen across the board in the technology print publishing industry, and the company's stock price has stagnated despite a string of acquisitions.

But the news of a potential sale still came as a surprise to most CMP employees, and prompted considerable internal criticism of the board's decision.

Chief executive Michael Leeds told employees that the company's stock price had not reflected the company's actual value, and that merging with another firm could help CMP grow faster.

"Our objective is to continue to grow, but we believe that the market price for our stock, which does not reflect the inherent value of our assets, limits our ability to meet this objective," Leeds explained in an email to employees.

The news did help boost the company's share price, which has struggled to break above the low 20s since going public in mid-1997. The day after Leeds' announcement, the stock rose nearly 30 percent, yet has hovered near the low 30s ever since.

The Leeds family also moved to quell internal discontent by promising employees a gift of $2,000 for each year of service, once a sale goes through.