By: Deborah Yao
Struggling newspaper publisher Journal Register Co. is considering several offers to buy or invest in the company, a major shareholder said.
Richard Barone, chairman of The Ancora Group in Cleveland, said Wednesday he met with the company a few weeks ago to discuss his own offer to buy a 70 to 90 percent stake for $25 million.
“They’re going to give it consideration,” Barone told The Associated Press on Wednesday. “They’ve had other offers and they’re going to look at all these different options.”
Messages left for representatives of Journal Register were not returned.
The company owns 22 daily newspapers, including the New Haven Register in Connecticut, and 312 nondaily publications. Like many newspaper owners, it has struggled with declining advertising revenue. In April, the company’s stock was delisted from the New York Stock Exchange because its stock price fell below required limits for listing.
In the first quarter, Journal Register’s revenue fell by 10 percent to $102.4 million. The company incurred a net loss of $72.2 million, or $1.84 per share, mainly due to a writedown related to its Michigan and New York publications. A year ago, it posted a profit of $29.1 million, or 74 cents per share.
On May 12, Barone sent a letter to Journal Register’s chief executive, James Hall, with his proposal. He said he later met with Hall and the company’s investment banker to discuss the deal. Barone expects Journal Register to make a decision about its options by the end of the month.
Barone said the company has $645 million in bank debt, “which they will not be able to service by the first quarter of next year. Something has to be done between now and then.”
Barone’s investment depends upon a restructuring of the company’s bank debt. Without it, he said he is not interested in pursuing a majority stake.
If his investment goes through, Barone expects to keep the company public and retain current management to run the business since he has no direct publishing experience. He also would look into selling unprofitable publications.
“There are buyers for these that are not strictly financial buyers. They want to obviously break even but are not necessarily focused on profitability,” Barone said. “The issue is, they like owning the property.”
In spite of the newspaper industry’s ailing fortunes, he said it’s “not going to die. It looks like it’s dying, but there’s (always) going to be newspapers.”
Shares of Journal Register rose 2 cents to 22 cents on Wednesday. The market value of the company’s outstanding shares stood at $8.66 million.