APNewsBreak: Perelman denied bid on Pa. newspapers
PHILADELPHIA (AP) — Philanthropist Raymond Perelman says he has been “excluded” from the sale of The Philadelphia Inquirer and the Philadelphia Daily News days after former Gov. Ed Rendell and others announced a play for the company that owns them.
Perelman urged the company, Philadelphia Media Network, to conduct a fair and open sale of its assets. He said in a letter to the company’s board he was “dismayed” to learn he and others were excluded from the process.
He sent the letter Wednesday, a day after a journalists’ union, the Newspaper Guild, met with managers of the newspapers’ owner to complain that two stories this week about another potential bidder, developer Bart Blatstein, had been censored.
“Nothing is more important to me than continuing the strong tradition of journalistic integrity in our local papers and making sure the Inquirer and Daily News are preserved for the people for generations to come,” Perelman said in his letter, which The Associated Press obtained Thursday.
Perelman was told the bidding is closed and was denied the customary chance to review the company’s financial books, according to a person familiar with Perelman’s effort but not authorized to speak for him. That person talked Thursday to the AP on the condition of anonymity.
The company had no comment on the Perelman letter, spokesman Mark Block said.
Rendell’s team of investors includes Philadelphia Flyers owner Ed Snider, New Jersey Democratic powerbroker George Norcross and others. Rendell, a Democrat, told reporters on Feb. 3 that the group had submitted a non-binding letter of interest a day earlier. He called it a civic-minded group with deep pockets that did not need to turn a quick profit on the venture.
Rendell declined to comment Thursday on the sale process.
The presumed sale of the city’s two largest dailies comes less than 18 months after hedge funds paid $139 million to top Perelman at a bankruptcy auction. Perelman and his son, billionaire Revlon Inc. chairman Ronald Perelman, bid at least $85 million in cash.
Media observers believe the company may now be worth less than $40 million.
Raymond Perelman heads privately held RGP Holdings Inc., which includes manufacturing, mining and financial interests. He has donated $225 million to the University of Pennsylvania medical school and millions more to the Philadelphia Museum of Art, the Kimmel Center for Performing Arts and other local endeavors.
He said in his letter he was therefore “surprised and dismayed” to learn that he and others can’t bid for the city’s newspapers.
A New York investment bank conducting the sale, Evercore Partners, declined to comment Thursday.
Hedge funds Alden Global Capital and Angelo Gordon, two of the largest stakeholders in the company, didn’t return telephone calls seeking comment. They can conduct the private sale however they wish, but observers are puzzled why they wouldn’t seek multiple bids to drive up the price.
“If they want to sell, why wouldn’t they want to get the highest price? Why would they be turning away bidders with cash?” asked lawyer Larry McMichael, who represented former owners in their long, acrimonious bankruptcy fight with creditors.
The creditors prevailed and have since sold off the headquarters building to Blatstein for $22.6 million.
Blatstein said that since he acquired the building he has been “increasingly intrigued by the operations.”
“I would want to do the best job possible to bring the greatness back to this great institution,” he said.
Blatstein said he’s gotten no response this week to his inquiries about the sale process. He has revitalized the nearby Northern Liberties neighborhood, putting restaurants and upscale apartments on and around a former brewery site. He sees the newspapers as a good business venture.
“This is a business, and it needs to be run as a business, a money-making business, and be independent at the same time,” he said.
Block, the newspaper company spokesman, confirmed that he had removed from the newspapers’ Philly.com website on Tuesday a reporter’s blog post about Blatstein’s interest because he considered it misleading but said it wasn’t his intent to question the accuracy of the reporting.
“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.
He declined to comment on the second union grievance, that management removed a paragraph from an Inquirer story on the company’s finances and put the potential market value at less than $40 million.
The union vowed to continue to press the issue with management and investigate other allegations of “mysteriously removed” work.