BUFFALO, N.Y. (AP) - The Buffalo Sabres have signed a nonbinding letter of intent to purchase the Rochester Americans of the American Hockey League in Terry Pegula's latest bid to expand his hockey empire.
"We are two-three days into our due diligence," a person familiar with negotiations told The Associated Press on Tuesday. The person spoke on the condition of anonymity because of a confidentiality agreement that is in place.
A formal sale would be months away, and require clearing numerous hurdles. One obstacle is the Sabres' current affiliation agreement with the AHL Portland Pirates, which runs through the 2013-14 season.
The contract with Portland doesn't include an out clause for the Sabres, meaning they would have to ensure the Pirates have another affiliation deal in place with an NHL club.
Sabres spokesman Michael Gilbert said the team had no comment.
Buffalo's interest in the Americans comes three months after Pegula purchased the Sabres for $189 million. A Pennsylvania billionaire, Pegula is a longtime Sabres fan, who has injected new life into the franchise.
He's also an avid hockey fan who, in September, donated $88 million to Penn State, his alma mater, to fund a new multipurpose arena and help upgrade the men's hockey program. The 60-year-old has an estimated worth of $3 billion and was most recently ranked 110th on Forbes magazine's list of wealthiest Americans.
The purchase of the Americans would reunite the Sabres with their former minor-league affiliate after the two broke ties following the 2007-08 season. It would also make it easier for the Sabres to make roster moves, as Rochester is about a 90-minute drive east of Buffalo.
Americans president Lewis Staats had no comment, team spokesman Craig Rybczynski said.
In an interview published in Tuesday's edition of The Rochester Democrat and Chronicle, Staats did say the team had been approached by more than one NHL team this year.
A sale would have to be approved by the AHL board of governors.