Herald-Dispatch to be sold to Cabell delegate
CHARLESTON, W.Va. -- Champion Industries plans to sell the Huntington Herald-Dispatch newspaper for $10 million, according to a filing with the U.S. Securities and Exchange Commission. The company bought the Herald-Dispatch for $77 million in 2007.
Marshall Reynolds, chairman and CEO of Champion, plans to sell the company to his son, Doug Reynolds, according to the June 21 filing with the SEC.
Doug Reynolds, a Democratic member of the House of Delegates from Cabell County, has already put down $2 million in escrow. He will pay $10 million cash for the newspaper and assume all debts, a letter of intent filed with the SEC on June 18 states.
The transaction will close on or before July 15, according to the filing.
Marshall Reynolds said Tuesday the transaction is simply a transfer of assets.
"It wouldn't matter if it was $10 million or $100 million," he said. "In order to have an arms-length transaction, you have to have some third party put a number on it.
"It seems like the thing to do and it will probably let it end up as an S [corporation]," Marshall Reynolds said, noting that would result in paying fewer taxes.
The filing notes that after a nationwide bid process, another offer was made to purchase the newspaper, but Doug Reynolds' offer was better. Marshall Reynolds wouldn't name the other bidder Tuesday.
Marshall Reynolds said it's hard to put a price tag on the paper, which has a daily circulation of about 23,000 on weekdays and 28,000 on Sundays.
"Lord, you can have this paper appraised today and some would say $30 million and some would say $5 million," he said. "The industry has taken a terrible beating."
Marshall Reynolds said he is happy the paper will remain locally owned.
"I didn't want this paper to go away, it needs to be owned locally by people who care about the newspaper and all newspapers. ... It's important to keep ownership within the community," he said.
Doug Reynolds was in Italy and not available for comment, his father said.
Huntington-based Champion Industries, a commercial printing and business furniture supplier, operates businesses in Indiana, Kentucky, Louisiana, New Jersey, North Carolina, Ohio, Pennsylvania, New York, Tennessee and West Virginia.
In 2007, Champion purchased the Herald-Dispatch from New York-based GateHouse Media for $77 million. The purchase, made with borrowed money, created a financial burden for Champion, as it was $10 million higher than its total assets at the time.
Earlier this year, Champion received a notice of default from Fifth Third Bank on the $70 million loan the company used to buy the newspaper, according to a filing with the SEC.
On April 30, Champion had about $36.5 million of interest-bearing debt, meaning it had paid about 61 percent of its debt from purchasing the newspaper, a filing with the commission states.
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