The auction for Philadelphia Newspapers LLC’s publictions (the Inquirer, Philadelphia Daily News, and Philly.com) began early this morning here in New York.
Canada’s Stern Group has not made a bid, but still has the option to re-enter the auction later on. According to Philly.com, this leaves the bankrupt company in the middle of a bidding war between two groups – the firm’s senior lenders and a Philadelphia-based investment group. We previously reported that California-based businessman Rob Burkle had dropped out of the auction.
Earlier, disputes threatened to derail the bidding process, as Brian P. Tierney, chief executive officer of Philadelphia Newspaper called a provision that would result in “the media firm’s employees to be fired with a guarantee that only just more than 50 percent would be rehired” the worst of his fears:
The senior lenders accused Tierney of “unfair and despicable” tactics by airing the provision, which one lawyer said was common in such sales and was meant only as a starting point for establishing new levels for employment and compensation.
Almost all of the company’s unions support Tierney and his effort to assemble local investors. On Tuesday, those unions issued a statement decrying the possibility of mass layoffs and warning they would fight back.
To put it in industry terms: Yikes. We’ll keep you updated on the bidding process as it moves along or doesn’t, as the case may be.