UPDATED WITH OFFICIAL COMPANY STATEMENT (below)
Billionaire financier and husband of Chellie Pingree Donald Sussman will own a 75-percent stake in the Portland Press Herald/Maine Sunday Telegram and its sibling papers, according to the terms of a deal announced today. Previously Sussman had been loaning the company $3.3 million in exchange for a 5 percent stake.
This information is buried in Tux Turkel's otherwise pretty straightforward report on the PPH site. He writes:
Initially, Sussman had planned to lend MTM $3.3 million, acquire a 5 percent equity stake in the company and gain a seat on the board of directors. The financial structure changed, however, during final negotiations.
Institutional investors, including out-of-state pension funds, asked for important changes to the original package announced in February. Sussman's financial contribution still adds up to the same amount of money, $3.3 million. But instead of a loan, the money is being used for a straight purchase of private stock. The result is that Maine Values will have a 75 percent ownership stake in the company, rather than 5 percent.
That's a big shift. More remains to be seen. (The Bangor Daily News has a story with more of the background.)
The official company statement and the original story from Tux Turkel differ on whether Brodsky thinks it's a "good deal" or a "good day" - the PR firm that sent out the notice says it's not "deal" but "day" - and moments ago the quote in the PPH story was changed to reflect that, with no notice of the correction.
Also, the job numbers differ - apparently the company has 364 full-timers, and 412 total, including part-timers, again according to Tom Janenda of Elevate Consulting and Communications.
Full release here:
FOR IMMEDIATE RELEASE CONTACT: Tom Janenda
MARCH 27, 2012 (207) 590-8815
MAINETODAY MEDIA CLOSES NEW CAPITALIZATION DEAL:
Financing Secure, Focus Shifts To Building & Growing The State’s Leading Media Company
Portland, Maine – MaineToday Media (MTM) announced today it has finalized a financial restructuring plan with Maine Values LLC, owned by Maine resident Donald Sussman, to fund stabilization and growth plans at the state’s largest media company.
The amount of money involved and Sussman’s limited role in MTM did not change during standard due diligence scrutiny. However, institutional investors, including out-of-state pension funds, did require structural changes to the package. Sussman’s original offer in February proposed strengthening MTM by providing $3.3 million as a loan on favorable terms, which included a 5% equity stake in the company and a seat on the Board of Directors (not the Editorial Board). Under the agreement finalized today, Maine Values LLC is providing the same amount of money to strengthen MTM, but in the form of a straight stock purchase resulting in a 75% equity ownership of the company. This will mark the first time in 14 years these newspapers are Maine-owned.
“It’s a good day for our company, our 364 employees, and the 3,000 Maine vendors we work with in communities across the state,” said MTM Board of Directors Chairman Peter Brodsky. “As with any deal, we had to listen to our institutional investors and be responsive to their feedback. They believed the additional debt could have hampered our growth strategy and instead, wanted to see a straight stock purchase. This change will make us stronger. Maine Today Media is now on solid financial footing and poised for strong growth. We thank Donald Sussman and his team at Maine Values LLC for their willingness to stick with us and help strengthen MaineToday Media.”
“Maine people deserve healthy, financially stable daily newspapers that deliver unbiased, professional news on the important issues facing our state and our country,” said Sussman. “Although I would have preferred the original arrangement that combined a loan with a smaller equity stake, at the end of the day I want to do what is best for the company. I simply wasn’t willing to abandon this important community resource and the hundreds of good jobs that come with it. As I have said all along, I have no interest in being involved in what the news professionals at the company choose to cover, or how they choose to write about it. I’m just happy that the MTM newspaper business is secure and now has a chance to grow.”
Planning and progress towards implementing the broadly supported growth plan developed over the past year with the Board of Directors, management, the Newspaper Guild and consultant CRG Partners has been moving ahead in parallel with the due diligence process. MTM CEO Neil Heyside said the company was ready to move forward confidently.
“I can assure you that every last employee at MTM is pleased to see these papers get signed,” said Heyside. “I congratulate our Board of Directors and Maine Values, LLC on a job well done. Across the board, our people are ready to move into a strong new time of growth for MaineToday Media and provide our readers with exceptional news coverage.”