Three of the groups that lost out in the bidding for The Boston Globe say their offers were higher than Red Sox owner John W. Henry’s winning $70 million bid — prompting them to question the New York Times Co.’s sales process.
John Gormally, a Springfield television station owner and publisher of BusinessWest magazine, said that after meeting the Times Co.’s final bid deadline on July 26, he heard nothing from the company until a week later, in the early hours of Saturday morning, when an e-mail around 3 a.m. from the investment bankers announced the sale to Henry.
“I was surprised. Our offer was considerably higher than Henry’s,” Gormally said, at the “upper range” of the $65 million to $80 million the Globe had previously reported for bids. He noted that the Times Co., as a public company, has a responsibility to shareholders to maximize value.
“All the bidders expended considerable time, energy, money, and the process was not transparent at the end to the bidders,’’ Gormally said.
Robert Loring, a Massachusetts native and founder of Revolution Capital, a West Coast investment company that owns the Tampa Tribune, also said his bid was larger than Henry’s, and included $80 million in cash.
Loring, too, said he was taken by surprise when he learned Henry had won, and was disappointed by how the bidding was handled.
“We felt we had a strong offer for the company and we had a strong offer for management. We felt we were the best buyer for the business,’’ Loring said. But, he added, “It’s the way it goes sometimes — you win some and you lose some.’’
Meanwhile, another bidder, John Lynch, chief executive of the U-T San Diego newspaper, told the Globe on Sunday his group was the “highest bidder,” but would not give the precise sum of the offer. In response to questions from the Globe, Lynch said in an e-mail, “It was clear they didn’t want to sell to us, or wanted to sell to Henry.’’
Several bidders have suggested that Henry may have to get government approval to own both the New England Sports Network and the Globe. In addition, Lynch said in a weekend interview with the Boston Herald that Henry could influence Red Sox coverage and decide whether to cover other local teams.
Henry, in a statement issued late Saturday, addressed that looming question directly for the first time.
“Now that I have a prospective role in Globe leadership, if I were foolish enough to try to influence Sox coverage by the Globe, I would only succeed in diminishing the value of both great institutions,’’ Henry said.
Henry won the Globe bid over a half-dozen rival offers. In addition to Gormally, Lynch, and Revolution Capital, the losing bidders included members of the Taylor family, which sold the Globe to the Times Co. in 1993; a group led by Boston businessmen Jack Connors and John Fish; and a group led by Boston attorney Shannon Liss-Riordan, who had hoped to include employee ownership in her offer.
The Times Co., in a statement, said, “The sale to John W. Henry is the result of a very full and active sales process.’’ Spokeswoman Abbe Serphos also said that in reviewing the bids, the Times Co. “took many factors into consideration, and at the end of the process concluded, along with our board of directors, that this agreement to sell the New England Media Group to Mr. Henry was in the best interest of our shareholders as well as of The Boston Globe, the Worcester Telegram & Gazette, and the Boston community.’’
Back in February, when the Times Co. put the Globe up for sale, Times Co. vice chairman Michael Golden had said that “price was important.’’ But he also said other factors, like the ability to close a deal efficiently, would be weighed.
Lynch had told the Herald in mid-July his group was no longer interested in the Globe. But last Friday, when the Times Co.’s board met to select a buyer, he believed the U-T San Diego owners were still in the running. But by midnight, no deal had yet been signed. Negotiations continued with the Henry group’s lawyers until early Saturday morning, when the deal was announced.
Lynch said his group was misled by the Times Co. and that it intends to seek repayment for the money it spent preparing its bid.
“The Times is able to sell to whomever they wish. That’s the way America works and we are fine with that,’’ Lynch said in his e-mail. However, he added, “we are confident that we will be reimbursed for our expenses as a result of the articulated process not being followed.’’
He and Gormally both said they wished Henry the best. “Our issues are with the Times” and their investment bankers at Evercore Partners, he said.
The Globe had previously reported that Henry had one of the lowest bids in the mix. People involved in the process said he won the sale because of his stature in the community and his ability to pay cash. Henry also has had a long relationship with the Times Co., which was his Fenway Sports Group’s largest outside investor in the Red Sox for a decade.
Gormally, who said he is “still interested in buying the Globe if the deal with Henry falls through,’’ emphasized that while he was frustrated with the Times Co.’s process, he is not against Henry owning the Globe.
“If it does work out,” he said, “John Henry’s a great businessman and I think he’ll do very well in making sure that the Globe is around for a long time.’’