MediaNews Group, a nationwide media company, has made the sole qualified bid for Reading Eagle Company's assets.
In a statement to employees this afternoon, company President and CEO Peter D. Barbey, said:
"We have received two bids to purchase Reading Eagle Company's assets. One of the bids is unqualified. The other bid is qualified. The qualified bid is from MediaNews Group, which also operates under the name Digital First Media. Since there is only one qualified bid, the auction has been cancelled. The qualified bid has neither been accepted nor rejected, and we continue to work with MediaNews Group to resolve certain outstanding issues."With only one qualified bid, a scheduled auction of the company's assets set for Friday has been canceled, according to the paper.
MediaNews Group is a Denver, Colo.-based company that owns 97 publications across the country, according to its website. The company owns 14 publications in Pennsylvania, including The Mercury in Pottstown, The Times Herald in Norristown and the Daily Local News in West Chester.
The bid from MediaNews Group would have to be approved by a federal bankruptcy judge. A hearing for that purpose is scheduled for Wednesday morning in Reading.
The family-owned Reading Eagle Company filed for bankruptcy protection under Chapter 11 on March 20, saying its financial situation had become untenable. It has continued to operate while a search was undertaken for a buyer.Reading Eagle Company includes the Reading Eagle, WEEU 830 AM, the weekly South Schuylkill News, Pretzel City Productions and its commercial printing subsidiary REP. The company has 234 employees.
The company began running into financial difficulties in 2009 after borrowing several million dollars to expand its headquarters along Penn Street to house a new press and distribution center. The company defaulted on the loan later that same year, owing Sovereign Bank about $25 million.
At the same time, the company's revenues, mainly from advertising, were falling.
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