This story ran May 17, 1985, in The Tennessean
Reuters, the British-based news service, proposed yesterday to buy some -- but not all -- of the assets of financially ailing United Press International, sources told The Tennessean.
In a series of meetings with UPI executives and creditors, Reuters officials expressed an interest in acquiring UPI's basic news and photo branches but voiced disinterest in acquiring several subsidiary companies, said one source close to a UPI creditors' committee.
"All the creditors got was a basic outline of the Reuters proposal," said one source. "There were no details. They didn't discuss any dollar figures.
"It was a very complicated proposal, but basically the creditors were told that Reuters did want to buy certain assets of UPI -- but not all the assets."
Members of the creditors committee were informed of the proposal via a hastily arranged telephone conference call by Jules Teitlebaum, the New York attorney representing the creditors committee in UPI's Chapter 11 bankruptcy reorganization.
Teitlebaum was briefed on the proposal by Reuters officials following an earlier meeting yesterday between executives of Reuters and UPI.
There were conflicting reports over Reuters' interest in acquiring UPI's audio division, which supplies taped broadcast news reports to radio stations.
Creditors were told, however, that Reuters wants to acquire UPI's news and photo branches. Those primary operations of the wire service supply news reports and photographs to 7,000 newspapers, radio and television stations worldwide.
David Wickenden, a UPI spokesman, said Reuters made "no formal written offer" during the brief meeting in Washington.
"It was purely exploratory," said Wickenden, who declined to give further details.
A UPI story on the meeting said one source at the wire service felt the Reuters proposal fell far short of satisfying UPI Chairman Luis Nogales and President Ray Wechsler.
Mike Reilly, a spokesman for Reuters in New York, said the Reuters delegation "did not go there (to Washington) with a specific proposal." He declined to comment on whether a definitive proposal would be forthcoming."
Reuters was represented at the meeting by Peter Holland, manager of Reuters Overseas, and attorneys. Nogales and Wechsler were joined at the meeting by Maxwell McCrohon, UPI editor-in-chief and a member of UPI's four-man board of directors.
Nogales and Wechsler left town following the session for further meetings with potential buyers, company sources said.
Reuters runs a limited newsgathering operation in the United States, where UPI and The Associated Press are the major wire services.
Glen Renfrew, Reuters managing director, said in January that the company did not "see a good reason for going toe-to-toe with AP" when it considered buying UPI two years ago.
However, Reuters purchased UPI's foreign newspictures operation last year for $5 million, much of it in deferred payments. UPI and Reuters now sell photos to newspapers in a joint arrangement, with UPI providing domestic pictures and Reuters foreign photos.
Industry sources have pointed out that Reuters would face problems in offering a complete international newsphoto service if UPI fails to survive its financial crisis.
Observors have also told The Tennessean that Reuters would have an advantage over other prospective bidders because it is already intimately familiar with the "nuts and bolts" of operating a news service, it has managers who could instantly take over day-to-day operations, and that many of UPI's creditors think highly of Reuters.
At the same time, Douglas Ruhe, a co-owner of UPI, has said he does not consider Reuters his first choice in a possible sale, suggesting that such a deal might not leave UPI intact.
Any sale must be approved by U.S. Bankruptcy Court Judge George F. Bason.
Reuters employs 992 journalists and other editorial personnel worldwide, most of them overseas, Reilly said, and UPI has about 1,500 employees worldwide, with about 800 reporters and editors in the United States.
Reuters, which is publicly held, has been highly profitable in recent years, in large part because of its computer services that provide stock prices and other financial information.