UPDATE, 1:41 PM: Meredith, the publisher of Family Circle and the Ladies’ Home Journal, is the company that’s negotiating to buy Time Inc magazines, Fortune now says citing “two people familiar with the matter.” Meredith shares, which had been down about 3.5% in mid-day trading, rebounded after the report to close at $37.98, -0.1%. Time Warner closed +0.7% to $52.85, a 52-week high. 

PREVIOUS, 10:24 AM: This is one story that you can be sure the editors of Time Inc‘s Fortune nailed down before posting today. The magazine says that its parent company “has begun discussions to separate itself” from the publishing operation, which generated $3.4B in revenue last year, citing “three people familiar with the matter.” It adds that there’s at least one “serious buyer” who will be in today to discuss a possible deal. Fortune notes, though, that negotiations are “still in a formative stage and may never come to fruition.” Yet the magazine says that in one scenario being considered Time Warner would hang on to TimeSports Illustrated, and Fortune and sell most or all of its other publications including PeopleInStyle, and Real Simple. Investors have long wondered whether Time Warner would jettison publishing, which was once considered the heart and soul of the company but — like many print media providers — has struggled in the digital era. CEO Jeff Bewkes told CNBC recently that “we will keep investigating” what to do with publishing. Previously he and other execs scoffed when asked whether the company might follow News Corp’s lead and begin to separate publishing from Time Warner’s healthier entertainment assets. (News Corp is creating a new publicly traded company for its newspapers.) CFO John Martin told investors a few weeks ago that “very challenging industry conditions weighed on Time Inc’s results for both the quarter and the year.” At the end of January, Time Inc said it would slash about 6% of its global workforce. When Time Inc and Warner Communications merged in 1990, execs assured Congress and others that the entertainment assets would provide the cash needed to protect the newsgathering operations.