Lenders Win Phila. Newspaper Auction
(Article updated with information on the winners of the Philadelphia newspaper auction.)
NEW YORK (
) -- A group of hedge funds, including
Angelo Gordon
and
Alden Global Capital
, outbid Raymond Perelman at the auction for
The Philadelphia Inquirer
and
Philadelphia Daily News
. The winning bid totaled $105 million, well ahead of Perelman's offer of $85 million.
The group of creditors had agreed weeks ago to purchase the newspapers out of bankruptcy protection. However they missed the deadline to complete their planned $139 million buyout due to unresolved labor contracts with the papers' truck drivers, also known as Teamsters.
The two newspapers, run by private company
Philadelphia Media
, have been operating under Chapter 11 bankruptcy protection since February 2009.
Philanthropist Perelman and his son,
Revlon
(REV) - Get Report
Chairman Ronald Perelman, bid against the creditors. Perelman has been known to express his passion for the Philadelphia papers.
"I have a strong interest in protecting the integrity of the newspaper and in the continued employment of as many employees (as possible)," 93-year-old Perelman told
The Associated Press
. "How can you have a city without a newspaper?"
In 2006, a group of investors led by former advertising executive Brian Tierney bought the newspapers for $515 million, but then filed for bankruptcy in February 2009. This time around Tierney was not a bidder.
-- Written by Theresa McCabe in Boston.
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