sale effort moves
to the next step
Potential bidders will getOgden expanding in isles By Rick Daysog
to conduct due diligence
Efforts to sell the Honolulu Star-Bulletin passed a key hurdle after a number of investors emerged as potential buyers for the afternoon daily newspaper.
In a terse, two-paragraph statement yesterday, the media brokerage firm of Dirks Van Essen & Murray said it was encouraged by the number of parties that expressed a formal interest in the Star-Bulletin.
The broker's statement disclosed neither the names nor the number of parties responding to the Monday deadline to submit letters of interest.
The disclosure came after lawyers for Honolulu Star-Bulletin owner Liberty Newspapers L.P., Honolulu Advertiser owner Gannett Pacific Corp., the state attorney general's office and the citizens group Save Our Star-Bulletin met for more than three hours with federal Magistrate Barry Kurren to discuss potential bidders for the paper.
The parties consented to allow the bid process to continue. The next step would be for potential bidders to get detailed financial information about the newspaper.
Kurren is expected to issue a court order in a few days that spells out how the process will continue.
If no interested parties had responded by Monday, the sale effort likely would have ended and a pending anti-trust lawsuit against Liberty and Gannett would have moved toward trial.
Gannett and Liberty Newspapers announced plans in September to end their joint operating agreement and close the Star-Bulletin. Gannett was to pay Liberty $26.5 million in the deal. The two newspapers operate separate newsrooms but share business functions, such as production, circulation and advertising, through the Hawaii Newspaper Agency, which is owned by Gannett.
The state attorney general filed suit, alleging the two publishers conspired to create a monopoly in Honolulu.
A scheduled Sept. 19 trial was postponed, however, when Liberty agreed to a 65-day effort to sell the Star-Bulletin. That trial, currently pushed back to mid-November, could be moved back further by an extended deadline to submit bids.
A source said the potential buyers will be given details of the newspaper's finances and will have until Aug. 4 to confirm that they are interested. Formal bids must be submitted by Aug. 14.
Three groups have publicly expressed interest in buying the Star-Bulletin -- one led by former U.S. Rep. and broadcast executive Cec Heftel, another by Kauai publishers Peter and Jane McClaran, and ESOP Star-Bulletin, a majority of the paper's employees.
Josh Wolf-Powers, an agent for the New York-based investment banking firm, Keilin & Co., that is advising the employees, said today he has not been told officially that ESOP Star-Bulletin was among the qualified bidders. However, he said he is working with the broker on details of the confidentiality agreement that is required in order to review the newspaper's financial information.
Yesterday's meeting was attended by Rodney Kimura and Jack Rosensweig of the attorney general's office, James Bickerton of SOS, Lisa Munger representing Gannett and Diane Hastert for Liberty.
Philip Murray of Dirks Van Essen, attorney Todd Miller of SOS and Gannett attorney John Smith took part via teleconference. Murray, Munger, Kimura and Hastert all declined comment.
"I think the operative word for all parties is we are encouraged," Bickerton said after the meeting.
Star-Bulletin reporters Peter Wagner and
Russ Lynch contributed to this report.
W.Va. chain buyingBy Peter Wagner
free ad papers
Ogden Newspapers Inc., the West Virginia chain that acquired The Maui News early this year, said today it is purchasing The Maui Bulletin and the Honolulu Pennysaver.
The free advertising publications, both owned by Chicago-based American Publishing Co., will change hands July 1. Terms of the deal were not disclosed.
"We are excited by the possibilities presented by these advertising publications," said Robert M. Nutting, chief executive of Ogden Newspapers.
The two shoppers are expected to extend Ogden's reach into advertising markets on Maui and Oahu. "These are great papers that fill an important and unique advertising niche in their markets," Nutting said in a press release.
The Maui Bulletin, a 20,000-circulation, magazine-style publication with news articles, columns, a community calendar and TV listings, has been publishing for 27 years.
Maui Bulletin Publisher Keith Colombik said he is looking forward to a new relationship with a former bitter competitor, The Maui News.
"We've been going at each other's throats for 30 years," he said. "We're their biggest competitor and they're our biggest competitor. Between us we have 90 percent of the advertising on Maui. It's going to be interesting."
The Maui Bulletin, which has 11 employees, owns a printing plant in Kahului. Before the company acquired a printing press several years ago, the paper was printed in Honolulu at the Hawaii Newspaper Agency, which also also prints the Honolulu Advertiser and the Honolulu Star-Bulletin.
Colombik said The Maui News dominates advertising sales to supermarkets, banks and other major advertisers on Maui. The free Maui Bulletin has a corner on auto dealers and other clients, he said.
The Honolulu Pennysaver, a free weekly with 16 employees and a circulation of 40,000, has been published since 1982. It is printed at RFD Publications Inc., publisher of Midweek, and has no editorial content.
"I think this opens new doors for us," said Cindy Schultheis, who became publisher of the Pennysaver several months ago.
Ogden Newspapers is the parent of Maui Publishing Co., publisher of The Maui News. Ogden acquired the daily paper from publisher Richard H. Cameron on Feb. 1. The deal was handled by newspaper broker Dirks Van Essen & Murray, a Santa Fe, N.M.-based firm currently looking for a buyer for the Star-Bulletin.
The Maui News, with a circulation of 16,447 during the week, plans next month to switch to morning publication after a century of afternoon publication.
Ogden's CEO Nutting said he is optimistic about Hawaii's economy, showing signs of emerging from decade-long doldrums.
"We believe that Hawaii's recovering economy gives us a unique opportunity to participate in the expansion of these products."
Bulletin closing archive