NEW YORK, July 15 (Reuters) - An investor who offered $25 million to bail out Journal Register Co JRCO.PK said he is can no longer guarantee his offer after the ailing U.S. newspaper publisher failed to follow up.
“Although we met briefly ... I have had no substantive discussions with either you, your investment banker, or the lending institutions and their representatives,” Richard Barone, chairman of Ancora Capital, wrote to Journal Register Chief Executive James Hall in a letter sent on Monday and filed with the U.S. Securities and Exchanges Commission on Tuesday.
“There may be good reasons for the lack of communication. However, during the past two months a number of alternative investment opportunities have arisen, and I can no longer guarantee the aforementioned investment in Journal Register,” Barone wrote.
Ancora holds a little more than 5 percent of Journal Register’s shares.
Barone first made his offer in May. He said he would invest at least $25 million in the publisher in return for a significant ownership stake.
Journal Register, which owns the New Haven Register in Connecticut and nearly two-dozen other newspapers in several other states, was delisted from the New York Stock Exchange earlier this year and risks defaulting on its debt by July 23.
Like other newspaper companies, it has suffered from declining advertising revenue brought on by a weak real estate market as well as wider economic woes affecting many U.S. businesses.
The company had left Barone with the assumption that it would respond to his offer within 30 days, he told Reuters.
“Should they want to talk about it, I’d be happy to do so with the understanding that if my funds were still available, I still may have an interest,” he said. “It’s been over 60 days and I just thought this could go on and on, and I could miss opportunities.”
A Journal Register spokesman did not return a phone call seeking comment. Its shares rose 3 cents to close at 16 cents in over-the-counter trade. They had traded as high as $4.25 on the New York Stock Exchange a year ago. (Editing by Braden Reddall)