Blatstein group says it wants to join PMN bidding

In 2011, Philadelphia Media Network sold the 87-year-old tower on North Broad Street for an undisclosed sum to developer Bart Blatstein. The city values the site at $10 million.
In 2011, Philadelphia Media Network sold the 87-year-old tower on North Broad Street for an undisclosed sum to developer Bart Blatstein. The city values the site at $10 million. (MICHAEL S. WIRTZ / Staff Photographer)
Posted: February 09, 2012

The developer Bart Blatstein and four partners have formed a company to explore purchasing Philadelphia Media Network Inc. (PMN), parent company of The Inquirer, the Philadelphia Daily News, and Philly.com, but it is unclear whether the group will be able to participate in the bidding process.

Blatstein last year bought the iconic 18-floor tower occupied by the newspapers and the website.

Blatstein's company, Philly Hometown Media L.L.C., is trying to join the competition to bid on the media company now that it appears to be in play. Last week, former Gov. Ed Rendell and five partners announced that they had expressed interest in buying the company.

Blatstein is joined in the group by William A. Harvey, managing partner of Klehr Harrison Harvey Branzburg L.L.P., a Center City law firm; beverage mogul Harold Honickman, chairman of the Honickman Group of companies; Gerard H. Sweeney, president and chief executive officer of Brandywine Realty Trust; and Radnor lawyer Andrew L. Barroway, who specializes in class-action securities litigation.

PMN, which is privately held, has declined to describe the bidding process, which may lead to a change in ownership for the media properties.

On Monday, The Inquirer opted to hold an article about the Blatstein group's interest in the company because of uncertainty over where the overture fit into that bidding process.

On Tuesday afternoon, an item about the Blatstein group's interest by Daily News reporter David Gambacorta was posted on Philly.com. The blog post was removed a short time later by the company and replaced by a statement in which PMN spokesman Mark Block said the company "is not in discussions" with Blatstein or Philly Hometown Media to buy the properties.

Block later told the Poynter Institute journalism website that he was concerned the "Philly Clout" blog post could be misconstrued.

"In commenting on an update of Gambacorta's story on the 'Philly Clout' blog, I was concerned the statement from the Blatstein group press release could be construed as more than it was - by creating the impression they were in negotiations for the purchase of Philadelphia Media Network," Block said in a statement. "It was never my intent to question the accuracy of David's reporting - David is nationally known for his exceptional investigative stories, and this blog posting would be no exception to his stellar record of diligence and professionalism in getting the story right."

PMN is owned by a consortium of investment firms that bought the company out of bankruptcy in 2010. The owners have engaged Evercore Partners, a New York investment-banking firm, to market the company.

It is unclear whether Evercore is still accepting offers for the company. According to some reports, prospective bidders had until last Thursday to submit letters of interest.

The company's owners and Evercore have declined to comment.

In an interview Wednesday morning, Blatstein said his group stood "committed to proceeding with discussions about the purchase of the assets of PMN."

On Monday, the Blatstein group issued a statement that seemed to set it apart from statements made by the group organized by Rendell, which described the media outlets as a public trust and said it might be willing to accept a lower profit margin than pure investors might.

"We reject the notion that operating the dominant print and online source for news and information in the Philadelphia area has to be an act of philanthropy," the Blatstein group said.

"Notwithstanding the number and diverse quality of the streams of content available to us all," the group said, "there is no reason that a nimble and talented management team, operating in an appropriate cost environment, cannot execute on a plan which deploys exquisitely talented and dedicated journalists who engage, inform, and inspire their readers in a manner that is of real value to them and the producers of that information."

Honickman, reached at his office in Pennsauken on Monday, said Blatstein had reached out in recent days to form the group to explore the purchase.

"If the numbers look good, we might be looking at an investment. It depends upon the price," Honickman said. "I haven't done any due diligence yet."

In October, Blatstein bought PMN's North Broad Street headquarters for $22.7 million, according to city real estate records.

It is unclear whether Blatstein's interest includes retaining the media company as a tenant, since PMN has signed a lease to move to smaller offices at Eighth and Market Streets in June.

PMN is said to be gauging interest from potential buyers, and an imminent sale is not certain. Parties that express interest and sign a confidentiality agreement may be invited back for a more detailed exploration of the company's financial statements.

On Friday, Rendell confirmed that he and five other corporate and political leaders had submitted a nonbinding letter of interest in the company last week.

Also part of Rendell's group are New Jersey businessman Lewis Katz; Comcast-Spectacor chairman Edward M. Snider; William P. Hankowsky, chief executive of Liberty Property Trust; George E. Norcross III, insurance executive, New Jersey Democratic leader, and chairman of the board of Cooper Health System and Cooper University Hospital in Camden; and Krishna "Kris" Singh, president and chief executive officer of Holtec International in Marlton.

PMN's owners, which include the investment firms Alden Global Capital and Angelo, Gordon & Co., bought the media company for $139 million in 2010. Its previous owner, Philadelphia Media Holdings L.L.C., headed by advertising executive Brian P. Tierney, declared bankruptcy in 2009.


Contact staff writer Mike Armstrong at 215-854-2980 or marmstrong@phillynews.com, or @PhillyInc on Twitter.

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