Forstmann Little Buys Ziff Publishing Empire : Media: Price of $1.4 billion is less than what had reportedly been sought. PC Magazine is among the properties.

Ending a widely watched auction of one of the nation’s most successful publishing companies, Ziff Communications Co. said Thursday that it will sell the bulk of its assets--including the influential computer publications PC Magazine and PC Week--to the New York investment firm Forstmann Little & Co. for $1.4 billion in cash.

The price is short of the $2 billion to $3 billion the Ziff family had reportedly been seeking for Ziff Communications and its primary operating unit, Ziff-Davis Publishing Co., which dominates the computer publishing field and has revenue of about $1 billion. But the transaction does not include Ziff’s trade show business, its database company or a developing on-line information service, which are now being auctioned separately.

“Forstmann Little is an ideal home for Ziff-Davis Publishing,” said Dirk Ziff, who along with his two brothers inherited the company from his recently retired father, William B. Ziff Jr. “From the beginning of this process, it has been a high priority for us to find a home for Ziff-Davis that will respect its traditions, make the most of its innovations and provide a rewarding environment for its people.”

Forstmann Little, which has purchased 19 companies for more than $12 billion since it was founded in 1978, said it will retain the current management, including Ziff-Davis Chairman and Chief Executive Eric Hippeau. It denied any intention to sell off pieces of the firm.

“The Ziff family and Ziff-Davis management have built a great company which dominates its markets and has large growth potential,” senior partner Theodore J. Forstmann said. “We’re looking to own this for a long time and build it into a lot bigger company.”

Forstmann Little, which just last week bought a consumer products company from Eastman Kodak for $700 million, is acquiring Ziff’s magazine operations and market research company as well as the piece of Ziff-Davis Interactive that provides electronic information about the computer industry to on-line information vendors.

Ziff’s eight U.S. magazines had a combined circulation of more than 3.5 million last year and wield enormous influence in the computer industry.

Beginning in the mid-1980s, the magazines were pioneers in conducting sophisticated technical tests of computer products, and their reviews can often make or break a new personal computer or modem or CD-ROM drive.

The Ziff family will retain a small minority stake in the company. But the sale largely ends a remarkable family business in which Bill Ziff Jr. built a small consumer magazine company he inherited from his father into a consumer magazine powerhouse, then sold almost everything for more than $800 million in the early 1980s while suffering from cancer--then rebuilt the company from scratch into the dominant computer publishing firm.

His sons decided they would rather focus their energy on the family investment vehicle, Ziff Bros. Investments. Shortly after their father’s retirement earlier this year, the sons announced their intention to sell.

There has been some controversy in the publishing world as to whether the Ziff magazines have peaked or whether they still have good growth potential in a booming market.

Publishing companies including European giant Reed Elsivier and New York-based K-III Holdings were reportedly nervous about the prospects and decided not to pursue Ziff aggressively.

Forstmann will put up $900 million for the purchase, with the major investors consisting of 18 to 20 large pension funds. The rest of the money will be borrowed, and the deal is expected to close by year’s end.

Bids for the remaining three Ziff units were due Thursday night.

Ziff-Davis Publishing at a Glance

* Headquarters: New York

* Chief executive: Eric Hippeau

* Employees: 5,000

Divisions:

* Magazines: PC Magazine, PC/Computing, PC Week, MacWeek, MacUser, Windows Sources, Computer Shopper, Computer Gaming World, Computer Life, Family PC

* ZD Expos: Trade shows such as NetWorld, InterOp, Seybold

* ZD Electronic Information: Information Access (on-line full-text database of selected publications)

* Ziff-Davis Interactive: ZiffNet, InterChange (interactive on-line commercial services)

* International Media Group: Magazines for computer users in Germany, France and Britain

* Computer Intelligence/Info Corp.: Information research and operational analysis of companies and markets worldwide

* Ziff Technology Group: Logical Operation, Ziff Tech, Help Desk Institute, Ziff Institute Educational Services

* Ziff-Davis Press: Books on various computer-related subjects as well as interactive CD-ROMs

* Cobb Group: Computer newsletters and reference books

Sources: Company; wire reports