Deadline for Globe bids postponed
No new date given to possible buyers
The New York Times Co. has postponed tomorrow’s deadline for prospective buyers of The Boston Globe to submit preliminary bids for the newspaper, people briefed on the sales process said. No new date has been set for the bids.
Representatives of Goldman Sachs & Co., the investment banking firm hired by the Times Co. to manage the newspaper sale, have told interested parties they will be given more time to prepare an initial offer for the Globe and its sister paper, the Worcester Telegram & Gazette, the people said. These people asked not to be identified because they weren’t authorized to discuss the process.
In a letter to potential bidders last month, Goldman Sachs requested the nonbinding bids by July 8. The letter also said buyers would be asked to assume about $59 million in pension liability for the two papers. And it suggested that approved parties would be notified about a week later about taking part in a second round of bidding.
On July 20, the Globe’s largest labor union, the Boston Newspaper Guild, will vote on a new contract that would cut wages and benefits by $10 million. Prospective bidders had been working on their offers in an environment of uncertainty over whether union members would ratify a contract that includes, among other things, a freeze in pension contri butions and the elimination of lifetime job guarantees for about 170 veteran Guild employees.
The union’s membership last month rejected a previous contract offer, prompting the Times Co. to realize cost-savings by imposing a 23 percent wage cut on Guild members. Goldman Sachs’s representatives did not cite the upcoming second Guild vote as a factor in delaying the bidding deadline, the people briefed on the sales process said.
Spokespeople for the Globe, the Times Co., and Goldman Sachs declined to comment on the postponement yesterday.
Three local businessmen have surfaced as potential Globe bidders: Stephen Pagliuca, co-owner of the Boston Celtics and managing director at the Bain Capital private equity firm; Jack Connors, a former advertising executive and chairman of Partners HealthCare; and, Stephen Taylor, a former Globe executive and member of the family that sold the newspaper to the Times Co. for $1.1 billion in 1993. Connors and Pagliuca, who initially were considering separate bids, requested and were given permission by Goldman Sachs to join forces and submit a common bid.
Thus far, no media companies or financial firms - reliable bidders in past newspaper sales - have been identified as potential buyers of the Globe and the Telegram & Gazette, though some believe the names of additional bidders from Massachusetts and beyond have yet to emerge. Among the factors thought to be depressing interest from prospective buyers are the economic downturn, the financial pressures on newspapers - the Times Co. reported the Globe lost $20 million last year and was on pace to lose $85 million this year without union cost concessions - and the difficulty borrowing money for newspaper acquisitions.
Some prospective bidders are also thought to have been deterred by the pension liability, which could compel a buyer to divert income from the Globe’s operations to fund its pensions. To make the Globe more saleable, the Times Co. has agreed to keep more than $200 million in pension liabilities on its own books. While the Times Co. is seeking to package the Globe and Telegram & Gazette in the initial bidding, it is uncertain whether they ultimately will be sold together.
The Times Co., which is trying to raise capital to pay off its corporate debt, has also put up for sale its 17.7 percent stake in New England Sports Ventures, owner of the Boston Red Sox. While that sale is also being managed by Goldman Sachs, and some of the firm’s same investment bankers are involved in both deals, the two have been placed on separate tracks and no bidding deadline has been set for the New England Sports Ventures deal, the sources said.
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