Media Gen. sells Denver Post stock

By: Lucia Moses Richmond, Va.-based Media General plans to sell half its stock in the parent company of The Denver Post, using the money to pay off debt and possibly add to its newspaper and broadcast properties, centered in the Southeast.
The company plans to sell half of its 40% interest in Denver Newspapers Inc. to MediaNews Group's holding companies. The sale of the stock, plus the redemption of Media General's preferred shares in Denver Newspapers, will raise about $92 million.
At the close of the most recent transaction, which is subject to regulatory approval, Denver Newspapers will become a subsidiary of William Dean Singleton's MediaNews Group, whose flagship is The Denver Post. Media General eventually plans to sell the remaining 20% to MediaNews, giving Singleton's group complete ownership.
The sale represents the latest step in Media General's planned unraveling of its investment relationship with MediaNews, which started in 1987 when they bought Denver Newspapers together. In 1994, Media General sold its 40% stake in all MediaNews' other papers.
"It's been quite profitable for us," Media General spokesman Bob Pendergast says of the company's investment in MediaNews.
Media General wants to own its properties outright, and the proceeds from the stock sale plus $1.4 billion it expects to get from the sale of its cable division earlier this year will give it buying power.
"We're going to have a significant cash war chest to do whatever we want," Pendergast says, adding that the company may make acquisitions this year "if the price is right."
Media General has about $905 million in debt, mostly relating to the 1987 acquisition of Park Communications, a broadcast and newspaper company, Pendergast says.
Media General owns 21 daily newspapers centered in the Southeast and 13 television stations in the South. It owns or has an interest in two newsprint companies.
It had revenues of $974 million in 1998, up 7% from the previous year. Net income was $70.9 million, up 35% from 1997, not including an extraordinary item in 1997.
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