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One potential suitor for Time Inc has dropped out of the running to acquire the publisher of Time, People and Sports Illustrated, according to people familiar with the situation.

An investment group backed by Edgar Bronfman Jr, former chief executive of Warner Music, Len Blavatnik, the billionaire owner of Warner Music Group, and Ynon Kreiz, who ran Maker Studios, will not pursue an acquisition, the people said.

The group was among a number of prospective buyers that signed non-disclosure agreements to look at Time’s books in recent weeks. A person briefed on the negotiations said there was a “valuation gap” between what the group was willing to pay and what Time Inc believed it was worth.

Meredith, publisher of Better Homes and Gardens and Martha Stewart Living, is still considering a bid, people familiar with the matter said. The companies have flirted before with a deal. In 2013, Meredith discussed buying some Time Inc titles when they were still owned by Time Warner. Those conversations fell apart, and Time Warner ultimately spun the magazines into a separate company in 2014.

Time Inc declined to comment. Meredith could not be reached for comment.

Time’s board met this week to review options and has asked for final bids to be submitted in the next two weeks.

The Bronfman-led consortium initiated the latest round of speculation about the future of the nearly 100-year-old publisher when it made an unsolicited offer worth nearly $1.8bn in November. Time rebuffed the bid but brought in Morgan Stanley and Bank of America Merrill Lynch to assess takeover offers and other options.

A spokesperson for Mr Bronfman declined to comment.

The board is considering three options, according to a person familiar with the matter. It could sell the entire company, take an investment, or proceed as an independent company.

American Media, the owner of the National Enquirer, has expressed interest in buying some of Time Inc’s titles and signed a non-disclosure agreement with the publisher, according to a person familiar with the matter. But because Time is not considering selling only some of its magazines, American Media is not involved in current talks, the person said.

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