By: Mark Fitzgerald Gary Pruitt, The McClatchy Co. chairman and CEO, has stepped down from four family trusts that control 80% of the voting stock in the nation's third-largest newspaper chain, the company disclosed in a regulatory filing late Friday.
In a story by Dale Kasler posted Saturday afternoon on the Web site McClatchy's flagship Sacramento Bee, company Treasurer Elaine Lintecum said the change was made to "improve corporate governance."
She said it did not signal that McClatchy family members are thinking of taking the company private. "It's not a precursor to anything," she said.
"It seemed better governance to break up the roles," Lintecum said. "It was better to have him not have so many hats."
Because Pruitt must represent the interest of all stockholders in the company, his presence on trusts that own the controlling super-voting Class B shares could be considered a conflict of interest were the trusts to make moves to take McClatchy private.
McClatchy's already high debt load as a result of its blockbuster 2006 acquisition of Knight Ridder is a considerable hurdle to taking the company private now. The woes of Tribune Co., taken private last December in a highly leveraged deal engineered by Chicago real estate magnate, would seem to be an object lesson in the difficulties of going private in the present newspaper industry environment.
However, McClatchy stock has been considerably discounted by Wall Street in recent months, and is nearly 90% below its value at the time the Knight Ridder acquisition was announced.
McClatchy stock (NYSE: MNI) ended trading Friday at $3.66, up 20 cents, or 5.78%. It has traded in a 52-week range of $3.15 to $23.05.
For some commentary, go to the new Fitz & Jen blog:
Fitz & Jen
Comments
No comments on this item Please log in to comment by clicking here