By: Mark Fitzgerald
Ancora Capital Chairman Richard Barone told Journal Register Co. that he’s taking his $25 million rescue bid off the table.
In a letter to Journal Register CEO James Hall included in a filing with the Securities and Exchange Commission (SEC), Barone said the company had not adequately responded to his offer made in late May.
“There may be good reasons for the lack of communication,” Barone wrote. “However, during the past two months a number of alternative investment opportunities have arisen, and I can no longer guarantee the aforementioned investment in Journal Register.” Barone wrote.
Barone, whose Cleveland-based Ancora holds a 5.3% stake in the troubled newspaper publisher, had said he would invest at least $25 million in Journal Register in exchange for a much bigger stake in the company.
Journal Register has said it is exploring strategic alternatives, including the sale of all or some of its assets, which include the New Haven (Conn.) Register, The Trentonian in Trenton, N.J. and about 20 other dailies.
The paper is burdened by big debt taken on to finance a disastrous purchase of a cluster of suburban Detroit dailies. It has warned in regulatory filings that it expects to be in violation of its loan covenants by July 23. Journal Register (Other OTC: JRCO.PK) was delisted from the New York Stock Exchange earlier this year, and now trades on the Pink Sheets.
Journal Register stock closed Wednesday at 14 cents a share, giving it a market capitalization of $5.5 million.