Posted on 02/04/2008 2:26:36 PM PST by abb
Sun-Times Media Group Inc. said Monday it is up for sale and open to a deal that will reward shareholders while securing the future of its Chicago-area newspapers and Web sites.
The company's chief executive officer, Cyrus Freidheim Jr., said the board agreed to explore a sale because several key management initiatives are well under way. In recent weeks, the owner of the Chicago Sun-Times has trimmed $50 million in annual costs, more than 10 percent of its overhead, and settled a tax liability with Canadian authorities.
He said the company would consider all alternatives, including partnerships and the sale of individual assets. But Freidheim said an overarching concern is a transaction that would free the company from the "baggage" of convicted former owner Conrad Black and make it a stronger competitor.
Freidheim said he hopes a buyer would bring "an enthusiasm for what's possible in this industry and a real love for the place our publications have in the Chicago area."
The board set no timetable for a decision and could decide not to pursue a sale, the company said. Its properties include such suburban papers as the SouthtownStar, the Pioneer Press chain, the Post-Tribune of northwest Indiana and the Naperville Sun.
Freidheim declined to say if suitors have approached the company.
The publications constitute "a great franchise and we want to make sure this franchise prospers and grows," Freidheim said. "I believe that will more effectively be done with a new ownership situation."
Three Sun-Times Media Group directors were named to a committee that will direct the sale process. They are Gordon Paris, Graham Savage and Raymond Seitz.
The company made its announcement after the close of trading Monday. Its shares ended the day at $1.38, down 2 cents. The stock is down 37 percent this year because of declining revenues and Wall Street's dour attitude about newspaper companies.
Print publications have lost advertising dollars to Web sites while formerly paying readers now get their news for free on the Internet. A major overhanging issue for the company is that must negotiate a settlement with the Internal Revenue Service over a tax liability from Black's tenure.
The IRS is in talks with the company, but terms haven't been disclosed. Freidheim said the company could structure a sale so that a new owner has no liability for past taxes.
In its most recent earnings report, Sun-Times Media Group reported holding almost $300 million in cash and assets that can be converted to cash, a sum that could be applied to an IRS settlement.
"We will have a resolution that is satisfactory to the company," Freidheim said.
Black and three former cohorts were convicted of stealing $6.1 million from the company's predecessor, Hollinger International Inc.
Sun-Times Media Group has sued them to recover more than $60 million in legal fees it had to pay on their behalf.
Black's former No. 2, F. David Radler, pleaded guilty to looting the company and has repaid it $61 million. He is due to start a 29-month prison term Feb. 25.
ping
[Freidheim said he hopes a buyer would bring “an enthusiasm for what’s possible in this industry and a real love for the place our publications have in the Chicago area.”]
Freidheim is looking for somebody even more gullible than he and his partners.
The local village newspaper is now thicker than the Sun-Times.
Lets see who the new liberal lemming will be this time.
That picture is great. I wish I had the money to buy the Slum Times. I would fire the entire staff and re-stock it with gun totin’ American lovin’ conservatives.
Back then Marshall Field's also owned Channel 32 (WFLD-TV call letters then) and it was the home of my favorite Saturday night scary show:
"Berwyn?!"
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