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Follow the money in the Blethen Maine papers

The leaders of the group say they are not investors, but advisers to the planned purchase of Seattle Times properties in Maine. They predict finishing the much-delayed purchase by March.

The Seattle Times Co.’s effort to sell its money-losing Blethen Maine newspaper chain has a new twist. According to a Portland (Me.) Press-Herald story Thursday, the high-profile names in the investment group seeking to buy the Maine chain are not investors, as the group's leader had previously implied, but advisers. The money for the purchase is mostly coming from a Dallas-based private equity firm, HM Capital Partners.

Richard Connor, the Wilkes-Barre, Pa.-based newspaper publisher who heads the group, Maine Media Investment, told the Press-Herald that former Maine senator and U.S. Defense Secretary William Cohen, Robert Baldacci, brother of Maine Gov. John Baldacci, and a local developer, Michael Liberty, had no cash in the deal. Connor said that he was sorry if his earlier description of the three as active partners was misconstrued. “It wasn’t insincere,” he told the paper. “It wasn’t a public relations ploy.”

According to the Maine paper's story, "Connor, a Bangor native, said Wednesday that he would move to Portland to run the Press Herald and the other newspapers, and that the other group members could be financial partners in the acquisition. But Connor stressed that, after a sale, he alone will operate the newspapers."

In any event, Connor now says he’ll get a cash infusion from a Dallas-based private equity firm, HM Capital Partners. He also repeated his previous hope to tap three unnamed Maine-based banks for loans to complete the deal. HM manages a $1.6 billion investment portfolio and backed Connor when he bought the Wilkes-Barre Times Leader in 2006. Connor has said he turned the privately held paper around and it now makes a profit.

A BusinessWeek story describes HM Partners as partly specializing in acquiring distressed businesses, either through restructuring or bankruptcy. Blethen Maine does qualify as distressed — revenues were down some $20 million last year over 2007 and Seattle Times officials have warned the Maine company it wouldn’t have enough cash for a court fight over a contract dispute with its union. But so far the chain has not restructured or sought creditor protection under Chap. 11 of the federal bankruptcy code. Connor said he hopes to complete the much-delayed acquisition by next month.

Bill Richards is a former Wall Street Journal senior writer. He also operates a small farm in Kitsap County. You can e-mail him in care of editor@crosscut.com.


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