UPDATE 2-OpenGate, Zuckerman drop BusinessWeek bid -sources

Tue Oct 6, 2009 5:39pm EDT

* OpenGate, Zuckerman drop BusinessWeek bid - sources

* Bloomberg, ZelnickMedia remain - sources

* McGraw-Hill shares close up 2.8 percent (Adds Zuckerman dropping bid, background, closing share price)

By Anupreeta Das

NEW YORK, Oct 6 (Reuters) - Private equity firm OpenGate Capital and New York Daily News owner Mort Zuckerman have dropped out of the bidding for McGraw-Hill Cos Inc's MHP.N BusinessWeek magazine, people familiar with the matter said, leaving Bloomberg LP and ZelnickMedia to vie for the money-losing asset.

OpenGate and Zuckerman, who is also co-founder of real estate investment trust Boston Properties Inc (BXP.N), could have lost interest because McGraw-Hill executives favor a sale to Bloomberg, the financial news and data provider owned by New York City Mayor Michael Bloomberg, the sources said.

McGraw-Hill considers Bloomberg the best buyer for BusinessWeek because it could capitalize on the marriage of two brand names well-known in financial circles, another source told Reuters on Sept. 29. But the company has remained open to superior offers, the source added at the time.

OpenGate had put in a bid for the 80-year-old magazine last month, along with Bloomberg and ZelnickMedia.

Zuckerman, whose media holdings include U.S. News & World Report, came in with a last-minute bid, but dropped out a "few days ago," one of the sources told Reuters.

Zuckerman previously owned The Atlantic Monthly and Fast Company magazines, but his recent attempts to buy media properties -- such as a 2008 bid for the Newsday newspaper -- have been less successful.

OpenGate Capital, based in Los Angeles and Paris, is an opportunistic investor with assets around the world. Its media assets include TVGuide magazine.

McGraw-Hill said in July it was considering "strategic options" for BusinessWeek as ad sales worsened, indicating it might sell the magazine. The company hired investment bank Evercore Partners Inc (EVR.N) to run the sale.

A McGraw-Hill spokesman, Zelnick and OpenGate all declined to comment. A spokesman for Zuckerman was unavailable for comment.

Shares of McGraw-Hill closed up 2.8 percent at $25.98 on the New York Stock Exchange.

(Reporting by Anupreeta Das; Additional reporting by Robert MacMillan; Editing by Gerald E. McCormick, Matthew Lewis and Richard Chang)