Urgent: Justice Department reportedly clears path for sale of Honolulu Advertiser to its island rival; employment of 600 Gannett workers still cloudy

The Honolulu Star-Bulletin is now reporting that the U.S. Justice Department has closed its investigation into the planned sale of the newspaper -- a crucial step in clearing the way for that paper's owner to buy Gannett's Honolulu Advertiser, then merge the two dailies.

The transaction, announced Feb. 25, is expected to close on Saturday, the Star-Bulletin says.

The Justice Department examined the deal for possible anti-trust violations because the combination will likely result in the Star-Bulletin's being closed.

The paper has been offered for sale since the deal was first announced. But any such deal was seen as unlikely from the start. The Star-Bulletin quoted its publisher, Dennis Francis, saying: "I was not provided any information regarding whether there were any qualified bidders or any other information. The process was quite extensive and arduous but understandably necessary."

The fate of the 600 most union-represented Advertiser employees remains uncertain. Gannett has already handed them layoff notices. However, it's expected that many will be hired by the new owner of what ultimately would be a combination of the two papers.

Whatever the outcome, the Advertiser says in its story that the consolidation "will likely result in mass layoffs at both newspapers."

State Sen. Sam Slom had offered to buy the Star-Bulletin with an investor named Malia Zimmerman. But Zimmerman told the Advertiser that Justice Department officials said their bid was below the minimum, liquidation price.

Gannett agreed to sell the Advertiser for an undisclosed sum, after the paper sank into the red amid Hawaii's tourism-based economic bust. GCI has owned the paper since 1993.

[Images: today's papers, Newseum]