Luminar founder and CEO Austin Russell’s attempt to acquire Forbes Global Media Holdings has come to an unsuccessful conclusion. Integrated Whale Media Investments, the parent company of Forbes based in Hong Kong, terminated the agreement with Russell due to his inability to secure the necessary group of investors needed to finalize the deal.
Key Takeaway
Austin Russell’s bid to buy Forbes Global Media Holdings has failed due to his inability to secure the necessary group of investors. This setback highlights the challenges faced by tech entrepreneurs venturing into the media industry and Forbes’ ongoing search for a buyer.
Setback in Forbes Acquisition
In an internal memo by Forbes CEO Mike Federle, the news of the termination was first reported by Bloomberg. Russell’s family office provided a statement expressing their intentions behind the Forbes acquisition, emphasizing their focus on the philosophy of business-for-good and philanthropy in the new generation of capitalism. They ultimately determined that terminating the contract was in the best interest of all parties involved.
Challenges Faced by Austin Russell
In May, the 28-year-old tech star and founder announced his plans to purchase an 82% stake in Forbes Global Media Holdings, valuing the company at nearly $800 million. Initially successful, the acquisition required the support of multiple investors. However, complications arose when Indian investment firm Sun Group and others failed to provide the contracted funds by the November 1 deadline. Sun Group vice chair Shiv Khemka had committed to investing $300 million in the acquisition.
Russell was granted an extension to respond to the funding shortfall and dedicated the past two weeks to bridging the multimillion-dollar gap. Unfortunately, an updated agreement sent to Russell’s team included terms that were deemed unviable by the investor group involved in the deal, according to sources familiar with the situation.
Forbes: A Media Company Up for Sale
Forbes, widely recognized for its magazine and its iconic billionaire rankings, sold 95% of its company to Integrated Whale Media in 2014. The media company had initially planned to go public through a merger with the special purpose acquisition company Magnum Opus Acquisition Limited. However, this agreement was called off in June 2022.
Since then, Forbes has been in search of a buyer. Austin Russell, once hailed as the world’s youngest self-made billionaire by Forbes itself in 2021, was the latest tech entrepreneur to venture into the media industry. Notable examples of other tech magnates entering the media business include Amazon founder Jeff Bezos’ acquisition of The Washington Post in 2013 and Salesforce chair, CEO, and co-founder Marc Benioff’s purchase of Time in 2018.
