I have been puzzled why investment bank Evercore, run by Roger Altman, would have prevented the Perelman family and real estate investor Bart Blatstein from bidding for the Philadelphia Media Network, which included the Philadelphia Inquirer, Daily News, and Philly.com. Very few people turn down Ronald Perelman's money.
Having been a stockbroker that specialized in trading distressed securities before I became a reporter, I called my old Wall Street contacts. This included former employees of the reclusive Randy Smith, one of the current owners of the Inquirer. I frequently bought bonds from Smith's old firm, R. D. Smith, which was closed due to charges of insider trading charges that were never proven.
This is what I have unearthed.
Roger Altman of Evercore, the former deputy treasury secretary under Clinton, is an ethical investment banker, but wants to be Treasury Secretary more than anything. While former governor Rendell is not as close to Obama as he was to Clinton, he does some sway and could possibly help Altman fulfill his dream of becoming Treasury Secretary. Altman would do what he could do in the bounds of ethics to tip the auction to Rendell.
While I think all money is green, my sources thought Bart Blatstein might not have enough of a national reputation for Evercore to consider.
Smith, whom I have met, is superstitious like many traders. The very few investment losses in his career have come from investing in Perelman controlled entities so he is not in a hurry to be involved with Perelman again. (Before he invested in newspapers, Smith had an unparalleled track record in distressed trading.) Smith, who is conservatively worth $500 million, has long disapproved of Perelman's tactics against minority shareholders. His investment philosophy has always been "Burn me once, shame on you. Burn me twice, shame on me."
He is also a make "lemons out of lemonade" kind of guy. Being a trader of debt, he is all about leverage, financial and personal. He has already lost a boatload on his investment in Philadelphia Media Network. Wringing the last dollar out of this investment is not going to help him get out of the hole he is in. Rendell, however, could help him with wooing clients in the government sector, which is a weak spot for his firm, Alden Global.
Now a word about the greatest bromance of modern times - not George Clooney and Brad Pitt- but Ed Rendell and Lewis Katz. I have actually seen the always dignified 60 year old Katz lose his cool and run down the street after Rendell.
Katz hates the media. He told me once, "I never talk to reporters even off the record." People close to him said, "He will do anything that Rendell asks. He is not buying the Inquirer to make money.
In a six degrees of separation meme, Katz was my mother's very bad divorce lawyer many years ago. He certainly has come a long way from his law office on Kings Highway in Cherry Hill. I would not count him out.