The parent company of The Press-Enterprise said it has extended the deadline for the sale of the Riverside newspaper.
Dallas-based A.H. Belo Corp. said buyer Freedom Communications Holdings Inc. must purchase the Press-Enterprise for $27.25 million on or before Nov. 15. After that, A.H. Belo can terminate the deal, according to documents filed with the U.S. Securities and Exchange Commission. The sale was originally expected to close in mid-October.
A.H. Belo also noted other changes to the deal, including Freedom Communications paying a non-refundable deposit of $1 million for the Press-Enterprise, which will go toward the final payment price. There is also language in the agreement that says the buyer won't have "an unreasonably small amount of capital for the business in which it is engaged or will be engaged" when the deal closes.
Freedom Communications is the parent company of the Orange County Register. Company spokesman Eric Morgan said Freedom Communications plans to purchase the Press-Enterprise on or before the deadline.
"Due diligence in finalizing the transaction by both parties has caused a delay past the original target close date, but it is progressing," Morgan told KPCC.
But the L.A. Times questions whether the deal to buy the Press-Enterprise will actually go through. The Times reported that holding company 2100 Trust, which purchased Freedom Communications last year, is being sued by former Freedom shareholders.
Media analyst Ken Doctor said it's possible that A.H. Belo may have been spooked by the lawsuit. Doctor said the changes in the sales agreement could indicate that A.H. Belo has "concerns about 2100 Trust's ability to get the deal done."
Doctor said if Freedom Communications ends up backing out of the deal, it's possible other media organizations, like the owners of U-T San Diego, could be interested in buying the Press-Enterprise.