Times Co. reportedly sets bid deadline for Globe
The New York Times Co., through its investment banker, has asked potential buyers of The Boston Globe to submit preliminary bids by July 8, according to people briefed on the sale process.
In a letter to parties that have expressed interest in buying New Englandís largest daily, investment banking firm Goldman Sachs & Co., which was hired by the Times Co. to manage a possible sale, said it is looking for preliminary indications of interest, including a potential price range for bids, the people said.
They described the preliminary bids as nonbinding, stressing that the step was still early in the sales process. Following the preliminary bids would come more intense due diligence by those who indicate serious potential interest, said these people, who did not want to be named because they arenít authorized to speak about the process.
The Times Co. wants to sell the Globe as part of a package that includes the Worcester Telegram & Gazette, another paper the Times Co. owns. The letter, according the people, details that the buyer would need to assume the papersí $59 million in pension liabilities ó $51 million for the Globe and $8 million for the T&G.
The Times Co. bought the Globe for $1.1 billion in 1993 and the T&G in 2000 for $295 million. The T&G is the largest daily in central Massachusetts.
Representatives of the Times Co., the Globe, and the T&G declined to comment yesterday. A Goldman Sachs banker didnít return a phone call.
Goldman Sachs, a Wall Street leader in mergers and acquisitions, wants to maximize the number of bidders and run an auction. The names of three Boston businessmen have emerged as among the potential buyers: Boston Celtics co-owner and private equity investor Stephen Pagliuca, former advertising executive Jack Connors, and former Globe executive Stephen Taylor, a member of the family that sold the Globe to the Times Co.
Pagliuca and Connors are also in discussions about submitting a bid together, according to people who know them.
Itís unclear whether any of three Boston businessmen would also want to run the Worcester paper, but one person involved in the bidding said his group would likely sell the T&G to someone else.
While other potential bidders could also emerge, a sale of the Globe and the T&G is by no means guaranteed, according to the people briefed on the bidding.
The solicitation comes as members of the Boston Newspaper Guild, the Globeís largest union, are weighing a tentative agreement with management that would give the company $10 million in cost savings by cutting wages and other benefits while also eliminating lifetime job guarantees for about 170 union members. The concessions would presumably make it easier for the Times Co. to sell the paper. A ratification vote by the Guild, which represents nearly 700 editorial, advertising, and business employees, has been scheduled for July 20.
Other Globe unions ó representing press operators, mailers, and delivery truck drivers ó have ratified another $10 million in concessions. The Times Co. in April threatened to shutter the paper if it didnít get a total of $20 million in concessions from the unions. The Globe lost $50 million last year and was on pace to lose $85 million this year.
Even if Guild members approve the agreement and the companyís other cost-cutting and revenue-generating efforts pay off, the Globe continues to face financial challenges from the recession and the migration of advertisers and readers to the Internet.
(By Beth Healy and Robert Weisman, Globe Staff)