The two men who hope to buy debt-ridden United Press International are both described as wealthy, astute and politically involved, though neither could be mistaken for men of great renown in the United States.
Mexican newspaper publisher Mario Vazquez Rana and Houston real estate developer Joe Russo teamed up Monday with an offer to buy UPI in a deal that now requires the approval of a federal bankruptcy judge in Washington overseeing the financial reorganization of the 78-year-old news agency. In all, the two pledged more than $40 million to take UPI out of debt and try to rebuild it.
Although neither man is well known, both are described as having large fortunes with which to bail out UPI.
Vazquez Rana, who reportedly will own 90% of New UPI Inc., as the company will be called, is president of Mexican Editorial Organization, which owns Mexico's largest chain of newspapers with a total circulation of 2.1 million. In addition to nearly 70 separate newspapers bearing the name El Sol, the company owns Esto, a sports daily published in Mexico City that is the largest daily Spanish-language newspaper in Latin America.
El Sol considered starting a Spanish-language daily in Los Angeles last year, according to a newspaper executive involved in Spanish-language publishing here, though nothing came of the discussions.
Business associates described Vazquez Rana, 53, as a man with close political ties but whose own political views are hard to discern.
Carlos Celis, executive vice president of Expansion Publishing Group, a company that publishes several business magazines in Mexico, said Vazquez Rana was "very close" to the governments of former Mexican presidents Luis Echeverria and Jose Lopez Portillo.
"He is involved from the outside in politics," Celis said. "He is the kind of guy who is difficult to find out where he stands."
Vazquez Rana comes from a wealthy family whose fortune derives from Mexico's largest chain of furniture stores. He is probably best known in his own country, however, as a sportsman.
Vazquez Rana was a member of the 1972 Mexican Olympic team, serving as captain of his country's pistol shooting team. Mexico's pistol team did not win any medals that year.
He now heads the Mexican Olympic Committee as well as the Pan American Sports Organization, which puts on the Pan American Games every four years.
Russo, also 53, is owner of Russo Cos., a real estate development and financial services firm, which its company spokesman said "controls, manages and operates assets in excess of $1 billion."
Russo is described as a Texas real estate developer interested in the arts. His principal office building in downtown Houston, for instance, is called the Lyric Office Center, and during noontime he has a pianist in the lobby to perform "semi-classical" music. Outside sits a statue about 20 feet high of a man playing a cello, and on special occasions the Lyric Office Center blares recorded stringed instrument music from speakers in the building out into the street.
Stake in Magazine
Russo also has advertised the building in a series of personal radio ads around Houston as a special place attractive to arts-related businesses, and the office center features a concierge to run errands and elevators that talk.
Russo is known to have a financial interest in one journalistic enterprise, a 1-year-old Texas arts and life style magazine called Houston Style. Russo's share in the publication is something of a mystery. He is also part owner of an institute in Texas called the Houstonian, run by Russo's friend Tom Fatjo. The institute is based in part on furthering Fatjo's theories on success in business through self-confidence.
Fatjo, who became wealthy through a trash hauling business, has written a book based on his own experiences called "With No Fear of Failure" and subtitled "Recapturing Your Dream Through Creative Enterprise."
The institute includes a sports and fitness complex and several other related centers, among them a fitness retreat for women called the Phoenix.
Living Well Division
Russo also was heavily involved in backing the City Council campaign of another Houstonian official, Richard Hite. Hite runs a division of the Houstonian center for business executives called Living Well, which espouses maintaining family values and employing humanitarian principles at the office.
Michael Berryhill, editor of Houston Style, said Russo has "a let's-be-positive approach to everything," a gung-ho, can-do attitude not uncommon among successful Houston entrepreneurs. He also described Russo as interested in politics but not part of the "Houston Old Guard Establishment."
Most describe Russo as unusually smart and astute. When Houston began to suffer a glut in commercial real estate, for instance, Russo was among the first to recognize that Austin, Tex., would prove the next center for building.
Meanwhile, Santa Monica-based Financial News Network on Wednesday renewed its bid to buy UPI, although the offer was immediately rejected. FNN President Paul Steinle said UPI had granted his group 48 hours to refashion their bid on Monday, and today's bid was designed "to live up to that pledge."
"Now, if somebody wants to change their minds, there is an alternative bid out there," Steinle said. "The only reason we went through all this is that everyone was telling us we had the best deal, the best business plan and the most experience. It wasn't a perfect deal."
Steinle said FNN was the syndicator and manager. His group had six investors, including Biotech Capital Corp. of New York; Nella, the investment firm of Charles Allen Co.; Data Broadcasting Corp. of Vienna, Va.; Printon Kane, an investment banking firm in Short Hills, N.J.; Dominion International, a British real estate investment firm, and Stephen Rose & Partners of London, an investment firm.
UPI officials also detailed the finances of the deal Wednesday. Jeff Peterson, an investment banker with Bear, Stearns & Co., said Russo and Vazquez Rana would pay about $26 million for UPI, plus $15 million in working capital over two years.
Of that, Peterson said, the buyers would pay $12.77 million to unsecured creditors, $3.4 million in back taxes, $8 million to secured creditors and $2.5 million in administrative costs.
Times researcher Joanne Harrison in Houston contributed to this story.