Inquirer, Daily News could be headed for sale

The front of the Philadelphia Inquirer building at 400 N. Broad Street.
The front of the Philadelphia Inquirer building at 400 N. Broad Street.
Posted: January 30, 2012

A minority shareholder of the parent company of The Inquirer and Philadelphia Daily News is looking to sell its 30 percent stake, according to a story in the New York Post.

Alden Global Capital, a New York hedge fund that holds interests in several newspapers, was one of 32 investors that acquired the two daily newspapers and Philly.com for $139 million in October 2010.

Now the owners of Philadelphia Media Network Inc. are "in the middle of an auction" to sell the company for roughly $100 million, according to the Post story, which cited a source close to the situation.

The same unidentified source told the Post that "several suitors" were meeting with company management and those groups "would be asked to make binding offers in a few weeks."

PMN spokesman Mark Block said: "It would not be appropriate for Philadelphia Media Network to comment on a decision that Alden Global is making about their business."

He declined to comment further. Eli Combs, an Alden Global spokesman, did not reply to an e-mail seeking comment.

Private companies do not have to disclose when major shareholders increase or decrease ownership stakes. But such activity often occurs. And in general, a single minority shareholder controls only its shares and cannot, by itself, force an entire private company to be sold.

Alden Global controls significant stakes in many media companies, including Denver-based MediaNews Group Inc.; Irvine, Calif.-based Freedom Communications Inc.; and New York-based Reader's Digest. It also owns the Yardley-based Journal Register Co., which publishes the Delaware County Daily Times, the Times Herald, Daily Local News in Chester County, and other daily newspapers in the Philadelphia suburbs.

The New York Post story suggested that Alden Global may be changing its newspaper strategy. But an unidentified Alden spokesman was quoted in the story as saying: "We very strongly disagree that we have changed our commitment to media."

As a privately held company, Philadelphia Media Network does not publicly release its financial results. It's also not clear how the ownership stakes held by the various private-equity firms may have changed over the last 15 months.

When The Inquirer's current owners won a bankruptcy auction in April 2010, Alden Global was described as the "lead equity partner" in a group of creditors that sought to take control of the two daily newspapers, Philly.com, and their related properties.

Ken Doctor, media analyst for the Newsonomics website, said in an interview that acquisition activity has picked up in the newspaper industry recently. Billionaire Warren Buffett paid $200 million to buy his hometown Omaha World-Herald last fall.

In early December, private-equity firm Platinum Equity sold the San Diego Union-Tribune to a California hotel entrepreneur in a deal reportedly worth more than $100 million. Platinum had owned the paper for little more than 2 1/2 years.

Earlier this month, the New York Times Co. sold a group of 16 regional newspapers to Florida-based Halifax Media Holdings L.L.C. for $143 million in cash. The reasons for such sales vary, Doctor said. But what all have in common is that the prices for and valuations of newspaper properties are low. Real estate often accounts for nearly half of the value of newspaper companies.


Contact Mike Armstrong

at 215-854-2980 or marmstrong@phillynews.com.

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