Investor group's offer for PMN: $60 million

Posted: March 28, 2012

A group of local investors reportedly has offered to pay $60 million to acquire the parent company of The Inquirer, the Philadelphia Daily News, and Philly.com.

Those investors, led by businessman Lewis Katz and insurance executive and New Jersey Democratic leader George E. Norcross III, are seeking to buy Philadelphia Media Network Inc. from a collection of hedge funds and financial investors that has owned the media company since October 2010.

The Daily News said it had obtained a letter of intent, dated March 20, that was addressed to Evercore Partners Inc., the New York investment-banking firm handling the sale of PMN, and signed by Katz and Norcross.

Word of a possible ownership change for Philadelphia's biggest daily newspapers and dominant website emerged in late January. But details about the sale process have been scarce because, like many other companies, PMN is privately held and the negotiations are being conducted in private.

PMN management has consistently declined to comment on the impending sale, referring questions to Evercore, which was hired by the hedge funds, led by Alden Global Capital and Angelo, Gordon & Co.

On Tuesday, a spokesman for Evercore declined to comment on the letter of intent. Katz did not return a phone call seeking comment, while Norcross did not respond to an e-mail.

The $60 million offer is substantially less than the $139 million value PMN carried in October 2010, when the hedge funds won an auction to bring the media properties out of bankruptcy.

The Daily News said the letter of intent also mentions a proposal by PMN management to eliminate 35 jobs within the next six months. It was not clear in which departments those cuts might be made.

Earlier this month, PMN cut 45 positions in its three newsrooms through a combination of voluntary buyouts and layoffs.

PMN spokesman Mark Block declined to comment on the contents of the letter of intent or the possibility of more job cuts.

While the letter of intent names Katz, who made a fortune in parking lots and outdoor advertising and is a part owner of the New Jersey Nets, and Norcross, executive chairman of insurance brokerage Conner Strong & Buckelew, other investors in the group were not identified, according to the Daily News.

The philanthropist Raymond Perelman told The Inquirer that he was no longer a member of the Katz/Norcross investor group. "I was in the group," he said. "But it got a little complicated, so I decided I'll just withdraw."

Other members of the Katz/Norcross group have been reported to include philanthropist H.F. "Gerry" Lenfest; Krishna P. "Kris" Singh, chief executive officer of Holtec International Inc.; William P. Hankowsky, chief executive officer of Liberty Property Trust; and Edward M. Snider, founder of the Philadelphia Flyers.

Lenfest said in an earlier interview that he would act as chairman, taking a role that former Gov. Ed Rendell had said he would hold. It remains unclear what role, if any, Rendell may have in the Katz/Norcross group. Rendell was never one of the investors.

Contact Mike Armstrong at 215-854-2980 or marmstrong@phillynews.com, or follow on Twitter @PhillyInc. Read his blog, "PhillyInc," at www.phillyinc.biz.

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