After hanging up, he called his lawyer, who was not pleased. "That doesn't make any sense at all," he said. "Their lawyers prepared that letter you signed. I cannot recommend that you make it binding. Anyway, a letter of intent is never binding. It has to be subject to the final, definitive agreement."
Mansueto called back Ganz in Paris and explained his lawyer's reservations. "I don't care," Ganz replied. "You have to put 'binding' in that letter. If it says 'binding,' we have a deal. If it doesn't say 'binding,' we don't have a deal."
Mansueto called back Ganz in Paris and explained the lawyer's reservations. "I don't care," Ganz said. "You have to put ‘binding' in that letter. If it says ‘binding,' we have a deal. If it doesn't say ‘binding,' we don't have a deal."
Mansueto went to the hotel's business center and asked to use one of its personal computers. He downloaded a copy of the letter of intent that had been attached to an e-mail. Then he went through the document, changing "not binding" to "binding" wherever the phrase appeared. He printed out the letter, signed it, and faxed it to Ganz, following up with a phone call. "We have a deal," Ganz said. "I will now tell The Economist to go away."
29 Days
So ended one extraordinary episode in this magazine's history, and so began another. From the announcement to the deal, the whole process took 29 days. In Inc.'s offices on the eighth floor of 375 Lexington Avenue, the sense of relief was palpable, especially after it became clear that Mansueto did not intend to move the magazine to Chicago. Most of us would no doubt have felt equally relieved, and equally happy, had The Economist Group come out on top, but it seemed particularly fitting to have an Inc. 500 CEO as our new owner. Nor did it escape our attention that in the final analysis he'd won the auction only because, as a successful entrepreneur, he was willing and able to do something the other bidders could not do, namely, ignore his lawyers' advice and change the wording of the letter of intent. Had Helen Alexander, Ray Shaw, a Time Inc. executive, or the management of Alta done such a thing, they would have been risking their careers and exposing themselves to the possibility of litigation. They might even have been violating their corporate bylaws.
But was it smart for Mansueto to do it? And, when all is said and done, did he get a good deal? He thinks so. "I think I got a good price," he says. "It reflects some risk. It makes me feel good to know that The Economist bid a little more. That confirms that these are worth somewhat more than I paid."
Less than a month after buying the two magazines, Mansueto confronted one such risk, when John Byrne turned out to be not quite as passionate about Fast Company as Mansueto had thought. On July 17, Byrne—in what he called an agonizing decision—resigned as editor in chief to become executive editor of BusinessWeek. Shortly after that, Mansueto named Koten the CEO and editor in chief of both magazines.
At Inc., the main surprise has been the position we find ourselves in. It's one we've only been able to dream about in the past—even when the magazine was owned by Bernie Goldhirsh. As successful an entrepreneur and as wonderful a human being as he was, he had very conventional views about how businesses should be run. For example, we were never able to apply the open-book practices that had produced such extraordinary results in companies we'd featured in the pages of the magazine. Bernie didn't want to share the numbers with us.
So we had an excuse for not practicing what we preached and for not being the kind of business we liked to write about. We had an even better excuse once G+J took over. Now, all those excuses are gone. Joe Mansueto is every bit the type of entrepreneur and business owner we've held up as a role model to our readers. If we don't make Inc. the type of business we like to spotlight in these pages, we'll have no one to blame but ourselves.
Part 1 | Part 2 | Part 3
