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Wednesday, August 9, 2000

Star-Bulletin closing after 117 years

Bulletin bidding
deadline extended
until Sept. 1

Financial 'data room'
being held open
until Aug. 25

By Peter Wagner

A federal judge overseeing the sale of the Honolulu Star-Bulletin today extended the bid deadline to Sept. 1 from Aug. 14, an 18-day cushion for potential buyers still looking at the 118-year-old newspaper.

The extension, granted by Federal Magistrate Barry Kurren, came after several interested parties requested more time to research the company and prepare bids last week.

The order will keep a "data room", where potential bidders can examine financial information on the paper, open until Aug. 25. The data room had been scheduled to close Aug. 4.

Judge Kurren also set a Sept. 15 deadline for the court to review bids and approve a buyer.

If the process yields no buyers, a pending antitrust lawsuit against Star-Bulletin owner Liberty Newspapers and joint operating partner Gannett Pacific Corp., owner of The Honolulu Advertiser, is expected to go to trial, possibly early next year.

The deadline extensions drew hope that there is serious interest in the afternoon newspaper.

"We believe this means it is likely that there'll be one or more bids to continue publication of the Star-Bulletin," said Richard Port, spokesman for Save Our Star-Bulletin. "This has been our goal and the goal of the citizens of Hawaii who have extended so much support to our effort."

The citizens group, whose petition to keep the Star-Bulletin alive drew more than 20,000 signatures and the backing of mayors and county councils across the state, is a plaintiff in the antitrust suit.

Mike Fisch, president of Hawaii Newspaper Agency and publisher of the Advertiser, called the judge's action "good news."

"I don't think it was a surprise," he said. "I think it's an indication there is interest."

So far, four parties have publicly expressed interest in making a bid for the Star-Bulletin. They are: a group led by Windward auto dealer Mike McKenna; a group led by former Hawaii congressman and broadcasting executive Cec Heftel; ESOP Star-Bulletin, comprised of most of the newsroom employees of the paper; and a group led by Kauai businessmen Peter McClaran and Jeff Lindner.

Of those, all but the Kauai group, have publicly complained about the sales process, saying they were not getting the information needed to form a bid.

Phil Murray, lead broker in the sales effort, has defended the process and last week said the sellers were willing to work with potential bidders needing more time. He could not be reached for comment today.

The Star-Bulletin has been up for sale since April 24, which put the antitrust lawsuit on hold. The suit, brought by the state Attorney General late last year, alleged Star-Bulletin owner Liberty Newspapers and Gannett conspired to create a monopoly for the Advertiser.

Gannett in 1993 sold the Star-Bulletin to Liberty under terms including a 20-year joint operating agreement in which business functions are shared but the newsrooms of the two papers are kept separate.

Last September, executives of both companies announced that Gannett would pay $26.5 million to Liberty in return for ending the JOA and closing the Star-Bulletin.

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