Mr. Connors's interest in the Globe dates back several months and was sparked by the purchase of the Philadelphia Inquirer by Brian Tierney, chief executive officer of Tierney Media Holdings LLC, from McClatchy Co. over the summer, according to people familiar with the situation.
Shortly after, Mr. Connors asked Mr. Barnicle if Mr. Welch would be interested in participating. Mr. Barnicle asked Mr. Welch, who was initially skeptical but agreed to have lunch with the two men. As Mr. Connors explained the project over lunch roughly six weeks ago at the Four Seasons, Mr. Welch got more interested and signed on. Messrs. Welch and Connors agreed to put in $25 million and valued the paper at between $550 million and $600 million; the parties said they would be satisfied with a 5% to 8% return. The Times bought the Globe in 1993 for $1.1 billion.
Later, Mr. Welch asked James B. "Jimmy" Lee, vice chairman of J.P. Morgan Chase & Co. to analyze the possibility of making an offer. Mr. Lee assigned a small team of bankers to work on the project, but the bank's work is still "preliminary" according to a person familiar with the discussions, and no formal bid is in the works.
"I've been an avid reader of the Globe my entire life and I appreciate the important role the newspaper plays in the civic life of this community," said Mr. Connors in a statement. "But the current speculation is very premature. I have conversations about possible business deals all the time and 90% of them never move forward."
But in reaction to the article in today's Globe, several people with deep pockets in both Boston and New York have called and asked to be part of the group, according to the person familiar with the discussions. The group feels they could attract more advertising to the Globe because of the goodwill they would generate by being local owners.
Friday, October 27, 2006
This is getting interesting: