Lenfest poised to become majority owner of Inquirer's parent company

Lewis Katz (left) with co-owner H.F. "Gerry" Lenfest and son Drew.
Lewis Katz (left) with co-owner H.F. "Gerry" Lenfest and son Drew. (MICHAEL BRYANT / Staff Photographer)
Posted: June 12, 2014

This story was updated at 10:10 a.m. Wednesday.

Businessman and philanthropist H.F. “Gerry” Lenfest was poised Wednesday to become the sole majority owner of The Inquirer’s parent company after agreeing to buy out the son of his former partner, Lewis Katz.

Reached in Berlin by telephone Wednesday morning, Lenfest confirmed he expected an agreement to be completed during the day to purchase the interest of Drew Katz. He declined to provide details until it was completed.

The deal comes 10 days after Lewis Katz died in a plane crash outside Boston.

In a statement Tuesday, the younger Katz had acknowledged the negotiations. "Because of the turmoil of the last 10 days, I have made the decision it would be in the best interests of The Inquirer, the Daily News, and Philly.com to sell my interest in the company," he said.

The sale will leave Lenfest as the sole majority owner of Interstate General Media Holdings L.L.C., which he purchased with Lewis Katz for $88 million at auction May 27. The company employs about 1,800 people at The Inquirer, the Philadelphia Daily News, three websites, and a printing plant near Conshohocken.

Katz and Lenfest bought IGM from a group of their former partners led by George E. Norcross III. Katz, Lenfest, and Norcross were part of a local group of investors who bought the media outlets in 2012. The company was put up for auction among the group after a long-running dispute over its direction.

Lewis Katz was killed in a private plane crash May 31, four days after the auction. Drew Katz took over his share of the company with his death and was appointed to the board of directors.

The closing of the IGM sale was to be Wednesday. Lenfest said he expected it to go ahead as scheduled.

The $88 million bid by Katz and Lenfest bested a group led by Norcross and was $27 million more than the partners spent two years ago to form IGM.

Drew Katz had been quiet about his plans for the paper since his father's death. On Tuesday, the website Big Trial reported that he had a falling-out with Lenfest and would be selling his interest for $16 million.

The website reported that Lenfest, among other things, did not call Drew Katz to express sympathy over his father's death. Katz, in his statement, sought to dispel the notion that there was friction between the two men.

"I would also like to emphasize that despite public reports to the contrary, Mr. Lenfest sent me a heartfelt, beautiful note when my father passed away," the statement read. "My father loved Gerry Lenfest and Gerry loved my dad."

Katz added: "I believe strongly that the organization would be in excellent hands under the ownership of Gerry Lenfest now and in the years to come."

Katz, 42, a Stanford Law graduate and head of a national billboard company based in Cherry Hill, has been a director at IGM. Katz's only son - he has a sister as well - he was with his father often during the legal proceedings.

After the auction, Lewis Katz said he would seek additional partners.

On Tuesday, William A. "Bill" Graham IV, chairman and chief executive officer of an insurance brokerage, said he was approached by Lewis Katz to be one of 10 investors who would put up $1 million each to provide financial backing for the new ownership group.

Graham, who described himself as a close friend of the elder Katz, said he planned to honor his pledge to Katz and had already contributed the $1 million, but was not sure what his role would now be or if his money was still needed.

When Lewis Katz died, Lenfest unsuccessfully tried to get a 30-day extension on the closing of the deal with the Norcross group because of the complicated nature of the Katz estate, Graham said. The Norcross group insisted on terms, including an additional $1 million payment, to which Lenfest would not agree, Graham said.


chepp@phillynews.com215-854-2594 215-854-2594

Call using Skype Send SMS Learn more You'll need Skype CreditNo Skype credit required

comments powered by Disqus
|
|
|
|
|