Reader's Digest UK sold for just £1 to media tycoon Mike Luckwell

The UK edition of the iconic monthly magazine Reader's Digest has been sold by its private equity owner Better Capital for £1 to media tycoon Mike Luckwell.

The sale for a mere £1 comes after Better Capital, a company backed by British venture capitalist Jon Moulton, bought the Reader's Digest UK from administration in 2010 for £13 million (See: Better Capital gives Reader's Digest UK a new life) and later ploughed in £10 million.

However, Reader's Digest UK cut 95 employees from its 120-strong workforce in January 2013 and filed for a company voluntary arrangement (CVA) in order to stave off administration once again after sales of CD's and books collapsed since 2010, leading to a decline in its main catalogue business.

CVA is a legal agreement between a company and its creditors to set out terms for repayment or writing off debt.

But the magazine business with a circulation of 500,000 was profitable.

Luckwell, whose net worth is estimated to be around £135 million, said that he would now expand Reader's Digest, into the financial services business.

"The publication of Reader's Digest, will continue without interruption and its high editorial standards will be maintained," he said.

Reader's Digest UK had a peak readership of about two million in the 1990s. Its circulation had since seen a dramatic fall in recent years despite trying to launch an online edition.

Reader's Digest Association (RDA), the New York-based publisher of the Reader's Digest magazine, had put its 72-year-old UK edition under administration in February 2010 after the UK Pensions Regulator refused to approve a massive deficit in its UK pension fund.

RDA UK employed 135 people and had 1,600 members on its pension fund, and had accumulated a pension deficit of £125 million.

Reader's Digest's UK arm was given a new lease of life after it was bought out of administration by Better Capital in a debt free £13-million deal.

Reader's Digest founder DeWitt Wallace first thought of the publication as a young American copywriter while he was recovering in France from a shrapnel injury during the First World War. He spent four months poring over magazines sent from home, and on returning to the US at the end of the war, he decided to produce a new kind of monthly magazine - one that gathered together all the most interesting articles so that people could get the best of the best reading all in one-pocket sized place.

The first issue rolled of Reader's Digest off the presses in New York in 1922. DeWitt and his wife Lila had hoped to make $5,000 from their venture, but by 1929 the magazine had 290,000 subscribers, an income of $900,000 a year and was well on the way to becoming the world's most popular magazine.

The first UK issue was published in London in March 1938, and since then it has printed everything from laugh-out-loud jokes to ground-breaking articles. It was the first to exposé the dangers of smoking in 1952, and in 1988 highlighted the threat of a then little-known Islamic radical  - Osama bin Laden.