Troubled gay media company PlanetOut
(NASDAQ:LGBT) has agreed to merge with Regent Entertainment, the pair
announced Friday.
Losses have been mounting for PlanetOut
since 2006 when it acquired gay cruise line RSVP. But a little more
than a year later, RSVP found itself being sold off to Atlantis
Events Inc. for an undisclosed sum. In April, the company decided to
sell-off its magazine holdings consisting of gay monthlies The
Advocate and Out to Regent Releasing – the film studio
arm of New York-based LGBT cable channel here! – for $6 million.
The San Francisco-based company, parent
company of gay online market leaders Gay.com and PlanetOut.com, faced
possible Nasdaq delisting in August when it announced that it had
accumulated a deficit of nearly $100 million.
The agreement merges PlanetOut with
Here Networks LLC and Regent Entertainment Media Inc. The new
privately held company, called Here Media Inc, is to be helmed by
Stephen Jarchow. Here Networks CEO Paul Colichman will be its CEO,
while PlanetOut Chairman Phil Kleweno will sit on the new company's
board.
“We believe that the strategic fit
between PlanetOut and Here Media, and the complementary nature of
these respective businesses, their client bases, and their audiences,
will result in a combined company with greater financial and market
strength than either business on its own,” PlanetOut CEO Karen
Magee, who took over the company reins in July 2006 from Lowell
Selvin after he resigned for health reasons, said in a statement.
“This business combination will unite
a powerful broadband video solution with an iconic brand and a
leading URL in the LGBT community,” said Colichman. “We are
extremely excited about the opportunity to leverage this exceptional
collection of assets to expand our audience, grow our revenues, and
increase stockholder value.”
Here Media and its owners said they
will infuse $4.7 million into the new company. The companies hope
to finalize the deal, which is subject to regulatory and PlanetOut
shareholder approval, by the end of the second quarter.