March 12, 2010

Group still working to buy Blethen Maine

DIETER BRADBURY

— By

Staff Writer

PORTLAND — The key partner in an investment group that hopes to purchase Blethen Maine Newspapers said Friday that he has found a lead investor for the acquisition but has not completed all financing details.

Richard L. Connor, the leader of Maine Media Investment LLC, said HM Capital Partners, a private equity firm in Dallas, will be responsible for putting together the financing package for the purchase of the company.

A partner in the firm, Peter S. Brodsky, was the lead investor in The Wilkes-Barre Publishing Co., which Connor formed to buy the Times Leader newspaper in that Pennsylvania city in 2006.

''They have a proven track record of over 25 years of successfully completing acquisitions,'' Connor said.

Connor said he remains optimistic that Maine Media will be able to complete the deal, even though credit markets are tight and the partnership has missed what have proven to be two informal deadlines for consummating the purchase.

Connor and Blethen Maine Newspapers initially set a goal of closing on the sale by the end of 2008.

That goal was extended by about 30 days -- to roughly the end of January -- when Maine Media was unable to line up financing.

Connor said Friday that he now hopes to finish the acquisition within another 30 days.

''It's a little less stressful today than it was three weeks ago, because I have somebody that I've worked with before, and we have a reputation together,'' Connor said, referring to Brodsky.

Brodsky did not return phone calls seeking comment Friday.

According to HM Capital's Web site, Brodsky specializes in media investments and serves as a director in several of the firm's portfolio companies in television, management software, telephone directories and food.

He is a 1992 Yale graduate who previously worked in the investment banking division of Credit Suisse First Boston.

Robert P. Bickler, president and chief executive officer of Blethen Maine Newspapers, said there was no agreement on a timeline for the sale, but he declined to comment further.

In a memo to newspaper employees Friday, Bickler said both parties remain optimistic about the sale.

Frank Blethen, chairman of Blethen Maine Newspapers, said in a statement that he and his family will continue to work closely with Connor to complete a sale as soon as it is practical.

Blethen said that ''a sale to a Maine native with 40 years of experience owning and operating newspapers would be the best outcome both for the Maine communities we serve and for our valued employees.''

Maine Media is led by Connor, a Bangor native; William S. Cohen, a Republican former U.S. senator and secretary of defense; and business associates Michael Liberty and Robert Baldacci of Portland.

Connor said Friday that his three Maine partners will continue to play a role in the acquisition and might contribute equity to the purchase, even though the lead investor is from Texas.

''The Maine Media Investment partnership has a substantial amount of money invested already in this deal,'' Connor said.

''We would not be in the position that we are in if it were not for the work that Maine Media Investment has already done.''

He said the financial package Brodsky will assemble could include capital from a variety of sources, including individual investors, banks or other institutions, or the firm's own fund.

HM Capital Partners is currently managing a fund of $1.6 billion, according to the firm's Web site.

Connor said the Maine newspapers would be a separate entity from his company in Wilkes-Barre, even though the two would share the same lead investor.

He also said that he still needs to involve a bank in the deal, and that he continues to be involved in discussions with three Maine banks.

Connor also said there are details to work out with the Blethen family and the unions that represent many newspaper employees.

He said the Blethens have been working diligently to bring the sale to fruition as quickly as possible.

''They want this to be over with, if for no other reason than that they understand the impact on the employees,'' Connor said.

''They've been very sensitive about that.''

Besides the Portland Press Herald/Maine Sunday Telegram, Blethen's holdings in Maine include the Kennebec Journal in Augusta and the Morning Sentinel in Waterville.

The company's Maine Today division produces several Web sites and print publications, including The Coastal Journal in Bath and The Maine Switch.

The Press Herald has gone through three rounds of layoffs since the company was put up for sale last March.

Connor and the current owners have both indicated that additional cuts will be needed.

''The ongoing uncertainty is difficult for our employees, yet unavoidable,'' Bickler noted in his memo Friday.

''Please know that we are doing everything possible to conclude this process just as quickly as we can.''

Staff Writer Dieter Bradbury can be reached at 791-6329 or at:

dbradbury@pressherald.com

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