Apr 11, 2023 - Economy

Scoop: Sun Group dropped as lead investor in Forbes bid

Sun Group vice chair Shiv Khemka seated next to Russian President Vladimir Putin at the St. Petersburg International Economic Forum in 2014. Photo: Screenshot from a video of the forum on The Kremlin's English website

The consortium of investors looking to acquire Forbes has removed Sun Group as lead investor in the bid over concerns with the Indian investor group's ties to Russia, sources told Axios.

Why it matters: Sun Group’s deep connections with Russia have raised concerns about the deal's ability to clear U.S. regulatory review. Forbes hoped to close the $800 million agreement by the end of March.

Details: The move to have Sun Group dropped as lead investor was meant to minimize the role and influence that Sun Group vice chair Shiv Khemka would play in the agreement, one source noted. Khemka built his business and has lived in Russia for decades.

  • Sun Group will remain part of the bidding group, sources say.
  • GSV, a Silicon Valley-based investment firm that has long tried to get its hands on Forbes, remains part of the consortium, but it will not be the lead investor either, sources say.
  • Instead, the consortium is targeting high-net individuals in the U.S., like tech billionaires, to come in as investors so that U.S.-based firms and individuals make up the majority of funds raised for the bid.
  • One individual that the group has spoken with is CEO, chair and co-founder of Salesforce Marc Benioff. While Benioff doesn’t plan to participate in the bid, he has been involved in discussions, two sources noted. Benioff also owns Time, and Time's new CEO, Jessica Sibley, was formerly the chief operating officer of Forbes.
  • Forbes did not comment.

The big picture: The terms of the deal remain the same, sources note. The group is still valuing Forbes at roughly $800 million.

  • Sources pitched on the opportunity to invest in the deal say the investor group is focused on new growth areas for Forbes, like a venture investing platform and an education services arm.

Be smart: Forbes' owners have been looking to sell the company for years. The company already saw one deal die in part due to regulatory concerns around foreign ownership.

  • Last year, Forbes' efforts to go public via a blank check merger collapsed under regulatory scrutiny from Republican lawmakers.
  • They argued the transaction needed to be reviewed by the Committee on Foreign Investment in the United States because some of the financing for the blank check company Forbes planned to merge with came from a Chinese sovereign wealth fund.

Go deeper: Investors eye venture platform, education biz for Forbes

Go deeper