Newsweek Gets Bids but Where is OpenGate?

Did they or didn’t they?

One day after bids for Newsweek were due, it’s still unclear if OpenGate Capital has tendered a proposal. Avenue Capital Group, the hedge fund, submitted a bid Thursday while Fred Drasner, the former New York Daily News publisher, is also in the running, according to press reports.

Sidney Harman, the founder of audio equipment company Harman International Industries, is bidding, according to The New York Times. NewsMax Media pulled out last night after the Washington Post, which owns Newsweek, rejected its offer.

The Post put Newsweek up for sale in May. Much has been made about the financial state of the legendary weekly that produced $56 million in operating losses in 2009 and an $11 million loss in first quarter. Newsweek has no EBITDA (negative EBITDA, actually) which has made it a hard sell to PE firms.

Still, OpenGate, an opportunistic PE firm from Los Angeles, was interested. At least it was a few weeks ago and was planning to make an offer. Andrew Nikou, OpenGate’s CEO, did not return calls or messages to peHUB.

OpenGate is known for its legendary buy of TV Guide, which it bought two years ago for $1. The publication is now profitable, Nikou says,

OpenGate was also interested in Businessweek but lost out to Bloomberg LP last year.

Officials for the Washington Post declined comment.