Stunning Twist In Inquirer Auction

PHILADELPHIA - Brian Tierney’s “Keep It Local” Philadelphia Inquirer ownership teams up with a California rival in a last-ditch deal to keep the newspaper at next week’s auction.

According a report in the Inquirer, the prominent California billionaire and Democrat Ron Burlke had joined with Tierney, a prominent Republican, a local union and two local investors to make one of three bids for the Inquirer, Daily News and Philly.com.

The Inquirer report says Pennsylvania Gov. Ed Rendell was the intermediary in the deal, and that Burkle will kick in money as needed at Tuesday’s auction.

The lending group owed $300 million by Tierney’s first ownership group and a Canadian media company are the other two bidders.

Burkle had been expected to be the fourth bidder. But the sudden departure of local real estate tycoon Bruce Toll as a primary investor in the Tierney group’s bid left the door open for Burkle.

All three groups will meet in Tuesday in New York in a round-robin bid for Philadelphia Newspapers Inc.

Earlier in April, Tierney said his media group would run out of cash if the planned April auction of Philadelphia Newspaper was delayed. But Tierney won the legal fight to keep the auction set for April 27.

Tierney had wanted Citizens Bank to work with him, even though Citizens Bank was part of the lenders group seeking to oust Tierney.

The lendors group include sCitizens Bank, Angelo Gordon & Co. and the CIT Group and they lost a big legal fight with Tierney over their right to use $300 million in debt at the April 27 auction.

Tierney has said Angelo Gordon intends to control the news in three of four of the biggest cities in the country through its potential acquisitions of the Los Angeles Times and Chicago Tribune.

"In the end, if the hedge funds, speculators and lenders win, it going to be really bad for this company," Tierney said.

The $300 million is secured debt owed by Tierney’s group to the creditors as part of the $515 million acquisition of Philadelphia Newspapers he spearheaded in 2006.

Philadelphia Newspapers filed for Chapter 11 bankruptcy protection in February 2009 in an effort to restructure its $390 million debt load.

Philadelphia Newspapers employs more than 4,000 people in the area.