Final bids for the Financial News Network, originally due Jan. 18, were pushed back until Jan. 21 or possibly Wednesday at the request of the remaining suitors, per sources.
The field of bidders, once topping 20, apparently has been whittled to three: General Electric, parent of cable competitor CNBC and NBC; the Walt Disney Co.; and a partnership between Dow Jones and Paramount Communications. Going price for FNN alone is said to be about $120 million, down from the $150 million originally projected.
In addition, the network said Friday that its banks, Security Pacific National Bank and the Toronto-Dominion Bank, will give FNN a $4 million credit line and agreed to a waiver and forbearance regarding the default on FNN’s $49.5 million bank loans outstanding.
According to a source, a topic of debate is now the form that the sale will take. It originally was set up to be an “asset” sale, whereby the bidder would buy the web and let it go into bankruptcy before moving forward, leaving shareholders empty-handed.
The deal now is said to be a “stock” sale, which would allow shareholders of the troubled network to get something.
All of the remaining bidders were described as solid and not in need of any outside financing to take over FNN.
FNN has been in trouble since June, when it was revealed that the network’s parent, Infotechnology Inc., was in financial disarray. The companies were put on the market late last year.
Separately, Infotechnology announced Jan. 11 that the Small Business Administration has accelerated the due date on bonds issued by Infotechnology’s Questech Capital Corp. subsidiary.
In a statement, Infotechnology said the SBA is calling for early payment of more than $12.3 million in debt because Infotechnology did not meet certain capital requirements and failed to file forms relating to the fiscal year ended June 30. As a result, the SBA said all principal and accrued interest in debt securities are now due.