Eighteen months after a consortium of local businessmen bought The Philadelphia Inquirer, Daily News and philly.com, four of the six owners — who together own 58 percent — offered Wednesday to buy out the other two owners for $29 million.
The majority ownership group of Interstate General Media, led by New Jersey insurance executive George E. Norcross III, said in a statement that the offer represents a 12 percent profit on the 42 percent stake owned by parking lot magnate Lewis Katz and cable television pioneer H.F. "Gerry" Lenfest.
The offer comes in the midst of a highly-publicized dispute between the Norcross faction and the Katz-Lenfest side. The feud, which came to a head with the firing of Inquirer editor Bill Marimow earlier this month, is now in court. Katz and Lenfest sued to have Marimow reinstated and have Publisher Bob Hall fired.
“We did not want or initiate the litigation that has created a sideshow that will ultimately waste hundreds of thousands, if not millions, of dollars in legal fees that could be used to further the strengthen and build the company," Norcross and co-owner William P. Hankowsky said in a statement. "We are, however, prepared to end it by purchasing the minority share of the company owned by Messrs. Katz and Lenfest for immediate cash, with no strings attached. We are offering to purchase their shares for $29 million, which represents a nearly 12 percent profit over their investment in just over 18 months, not a bad return in this economic environment. We will wire the funds to their accounts within 24 hours of an agreement."
A message left for Katz at his office Wednesday afternoon was not immediately returned. A message left for Lenfest at his philanthropic foundation was also not immediately returned.
The offer comes on the same day that the IGM's second-ranking official, chief operating officer and associate publisher Michael Lorenca, gave his resignation to the company, according to an email sent to the company by Hall.
"Mike stated over the last several months that he has struggled under the current governance and ownership structure, which has made it impossible to complete his duties with traditional autonomy and independence," Hall said. "Under these circumstances, Mike no longer feels that he could be an effective leader in this environment. This is a regrettable consequence and unfortunate outcome of the pending litigation."
The six owners bought the news company in April 2012 for $55 million, roughly 10 percent what another group of local businessmen paid just six years earlier. That group, led by Philadelphia public relations executive Brian Tierney, paid $515 million and filed for bankruptcy just three years later.