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MediaNews Group stands as lone bidder to buy Reading Eagle; auction canceled

MediaNews is controlled by New York-based hedge fund Alden Global Capital.

  • Ron Southwick/PennLive
This screen capture shows the Reading Eagle website.

This screen capture shows the Reading Eagle website.

This screen capture shows the Reading Eagle website.

(Reading) — A large media group has emerged as the sole qualified bidder to buy The Reading Eagle out of bankruptcy, the newspaper reported Thursday night.

MediaNews Group, which formerly operated under the name Digital First Media, submitted the only qualified bid to purchase the Reading Eagle Company, the newspaper reported. The Eagle reported there was one other unidentified bidder that was not qualified.

With only one qualified bidder, a planned auction for the company slated to take place Friday has been canceled, the Eagle reported. The Reading Eagle Company filed for bankruptcy protection earlier this year amidst deep financial challenges.

Peter D. Barbey, president and CEO of Reading Eagle Company, said the bid from MediaNews “has neither been accepted nor rejected,” the Eagle reported, “and we continue to work with MediaNews Group/Digital First Media to resolve certain outstanding issues.”

MediaNews, based in Denver, Colo., owns the San Jose Mercury News, the Denver Post and many other news organizations nationwide. The company has bought a host of struggling newspapers and often engaged in deep cuts of newsroom staffs to reduce costs, industry analysts say.

Earlier this year, MediaNews attempted to acquire the Gannett newspaper chain, which publishes USA Today and more than 100 other papers, but that takeover bid was rejected. On Thursday, Gannett shareholders turned back an effort from MediaNews to win seats on the company’s board of directors, scuttling another attempt to acquire Gannett.

MediaNews is controlled by New York-based hedge fund Alden Global Capital. The company operates several papers in Pennsylvania, including The Mercury in Pottstown, The Times Herald in Norristown, and the Daily Local News in West Chester, among others.

The Eagle filed for bankruptcy protection earlier this year in the wake of serious financial pressures, a common theme for newspapers nationwide in recent years.

On Wednesday, bankruptcy attorney Robert Lapowsky said “multiple bids” were received by Wednesday’s deadline but didn’t specify how many bids were submitted.

The Reading Eagle Co. issued a mass-layoff notice this week with the state Department of Labor and Industry. The company has 234 employees. A company official said the warning only indicated that layoffs were possible but not a certainty.

“Reading Eagle Company does not concede it is required to comply with WARN’s notice requirements at this time,” Jennie Priest, executive director-human resources, said in a statement on the paper’s website. “Nonetheless, we wanted our employees to be aware of the protections WARN offers in the event of a mass layoff, which, as of the date of the notice, is only possible, not probable.”

Federal law requires companies with 100 or more employees to give such notice if there may be a mass layoff affecting at least 33 percent of the workforce.

Six employees were laid off last week, according to The Reading Eagle.

In addition to the newspaper, The Reading Eagle Company owns radio station WEEU, based in Reading, and a weekly newspaper in Schuylkill County. Last year, the Reading Eagle celebrated the 150th anniversary of the newspaper’s founding.

The Reading Eagle has garnered recognition as one of Pennsylvania’s strongest newspapers, earning dozens of awards in newspaper contests in recent years.

Earlier this year, the Eagle won the top honors among newspapers in its size in the Pennsylvania NewsMedia Association’s Keystone Press Awards. The Eagle has won the “sweepstakes” in its division for seven consecutive years.

The Eagle’s staffers earned 21 prizes in the 2019 Keystone Press Awards and will receive those honors at a banquet Saturday night.

 

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