Pulitzer nalistic legacy views as an Inc. has agreed to a $1.46 billion acquisition by Lee Enterprises Inc., entrusting its jourto a company it ideal steward. The deal, announced late Sunday, ended two months of speculation about the fate of
Pulitzer nalistic legacy views as an Inc. has agreed to a $1.46 billion acquisition by Lee Enterprises Inc., entrusting its jourto a company it ideal steward. The deal, announced late Sunday, ended two months of speculation about the fate of Pulitzer, whose holdings include the PostDispatch and the Suburban Journals of Greater St. Louis, and The Garden Island.
“We’re looking forward to becoming part of the Lee family, and to their proven commitment to quality community journalism,” said Shanna Pollard, Publisher of The Garden Island.
Lee will pay $64 a share in cash for all of Pulitzer’s shares, including the controlling interest held by members of the Pulitzer family. Pulitzer’s board of directors concluded unanimously that selling to Lee was the best way to enhance shareholder value and position the company for the future, said Michael Pulitzer, nonexecutive chairman and the grandson of founder Joseph Pulitzer.
“They share the same tradition and journalistic values that Pulitzer does,” he said. “In my opinion, we couldn’t have found a better match for the company.” Pulitzer and Lee said in a joint statement that they expect to complete the sale in the second quarter.
The deal would make Lee the fourthlargest U.S. newspaper publisher in terms of dailies owned, and the seventhlargest in terms of circulation, and would be the biggest in the newspaper business since Gannett Co. bought Central Newspapers Inc., owner of the Arizona Republic and Indianapolis Star, for $2.6 billion in 2000.
Lee, which has headquarters in Davenport, Iowa, sees the addition of Pulitzer as the continuation of its successful longterm growth strategy, said Mary Junck, chairman and chief executive.
“The acquisition of Pulitzer allows us to take an exciting and logical next step into another exceptionally attractive group of markets, exactly the kind where we excel as an industry leader in building revenue and circulation,” she said.
Lee operates 44 daily newspapers in 19 states. It had revenue of $683 million and profits of $86.1 million in its latest fiscal year.
Pulitzer owns 14 dailies and more than 100 weekly newspapers and other publications. It had revenue of $444 million and profits of $44.1 million last year.
Lee’s deal for Pulitzer also includes a small stake in the St. Louis Cardinals. Pulitzer Inc. and Michael Pulitzer together own slightly less than 4 percent of the baseball team.
Lee doesn’t expect to make immediate or major changes in the business or editorial operations at Pulitzer, which will function as a Lee subsidiary, Junck said.
Pulitzer employs 4,000 people, including about 1,300 at the PostDispatch.
Robert C. Woodworth, Pulitzer’s president and chief executive, said Lee is among the best newspaper operators in the country.
“When people ask me what to expect under the new ownership, the answer is obvious: Nothing breeds success like success, and Mary Junck has put together an impressive team at Lee that delivers results,” Woodworth said.
Pulitzer announced in November that it had hired Goldman, Sachs & Co. to help evaluate strategic alternatives, including the possible sale of the company.
Although Lee’s name was mentioned frequently as a possible suitor, many industry analysts expected a bigger chain, such as Gannett Co., to buy Pulitzer.
They also questioned Lee’s ability to bear the heavy debt it would take on in the deal.
Junck dismissed that concern, noting that the acquisition would be comparable in many ways to Lee’s $694 million deal for Howard Publications in 2002.
“We don’t actually view this as a big bite,” she said in an interview.
Swallowing Pulitzer would boost Lee’s revenue by 60 percent and its circulation by 50 percent. The deal for Howard Publications boosted revenue by 50 percent and circulation by 75 percent.
The closest Lee papers to St. Louis are the QuadCity Times in Davenport, the Southern Illinoisan in Carbondale, the Herald & Review in Decatur, Ill., the Journal Gazette in Mattoon, Ill., and the TimesCourier in Charleston, Ill.
Pulitzer, based in St. Louis, and Lee have followed similar paths in recent years.
Both companies sold their television stations to capitalize on high market values for broadcast properties and to concentrate on their core newspaper holdings.
Both have been expanding by snapping up small and mediumsized papers, which tend to have local monopolies and attractive profit margins.
Both are public companies, but are controlled by families whose shares give them a majority of the voting power.
Pulitzer and Lee also have similar strategies and priorities.
Lee emphasizes local news, local decisionmaking and strong publishers, editors and management teams.
“They push readership, circulation and revenues very hard, and they seem to have found some formulas that work,” said Terrance C.Z. Egger, senior vice president of Pulitzer and publisher of the PostDispatch.
Pulitzer has been succeeding on many of those same fronts in recent years.
In weighing the company’s future, the Pulitzer family decided to seek a partner now, while the company was in a position to negotiate the best deal.
“The company is very strong,” said Emily Rauh Pulitzer, the widow of Joseph Pulitzer Jr. and the company’s most powerful shareholder. “I think that one of the things that has made us attractive is the quality of our leadership. That’s a doubleedged sword. It makes it very painful.”
Pulitzer Inc. is the successor to the company founded in St. Louis in 1878 by the first of three Joseph Pulitzers who presided over the business.
Pulitzer has long been considered a candidate for a sale or a merger. It is one of the nation’s smallest publicly traded media companies, in an era where many rivals are pushing to get bigger and to diversify into other forms of media.
Three of the four Pulitzer family members who sit on the company’s board of directors are at least 70 years old, and no one from the next generation is involved in the daily operations of the business. Michael Pulitzer, Emily Pulitzer and members of another branch of the family, the Moores, own stock representing nearly 88 percent of the voting power of the company.
Their combined power means they had the authority to approve or reject any deal.
They were unanimously in favor of selling to Lee, Michael Pulitzer said. Egger said he was hoping to remain with the company and at the PostDispatch.
