LIBERTY GROUP LOOKS TO EXPAND

Chain Considers Current Prices Too High



Citing high prices being paid for dailies, Liberty Group Publishing's

President and CEO Kenneth L. Serota said it's 'unlikely' the company

will bid on the 70-plus dailies being sold by Thomson Corp., Hollinger

International, the New York Times Co., and Journal Register Co.



But Liberty may pick up some of the buyers' castoffs, Kenneth L.

Serota said during a Tuesday conference call to review the privately

held company's first-quarter results. 'We expect a lot of activity in

the second half of the year,' he said. 'As buyers of the big groups

become evident, I think there's going to be some resales.'



Northbrook, Ill.-based Liberty has amassed more than 310 community

publications since its founding in 1997 and is looking for more after

a recent influx of funding from Los Angeles-based merchant bank

Leonard Green & Partners L.P.



Its strategy is to buy dominant market papers with a circulation of

20,000 and below to complement its existing clusters or begin new

ones.



In other news, Liberty reported losses in the quarter mounted to $4.3

million, from $3.2 million in the year-ago quarter, reflecting costs

of recent acquisitions.



On a same-store basis, Liberty reported newspaper EBITDA (earnings

before interest, taxes, depreciation, and amortization) grew 27% to

$11.6 million as revenue grew 22% to $42.6 million on higher ad

revenue and lower newsprint costs.



For the rest of 2000, Liberty said it expects to meet its target of 3%

revenue growth, factoring in wage and newsprint pricing pressure

anticipated later in the year.



Liberty expects to finish converting all its papers to a narrower page

width by the end of the third quarter, which should offset higher

newsprint prices, Serota said.