New Pulitzer Owner: Its Employees?

By: (AP) Hoping to fend off outside suitors for newspaper publisher Pulitzer Inc., a group of St. Louis Post-Dispatch workers has launched a longshot quest to buy the storied company through an employee-ownership effort "to control our own destiny."

In a memo to Post-Dispatch colleagues this week, the six-person organizing group said they have met with advisers to explore prospects of making a bid and to "preserve the company's financial independence and advance the Pulitzer journalistic tradition."

The memo said the effort includes forming an Employee Stock Ownership Program, under which "all employees would be able to share ownership" of the company some analysts expect to fetch $1.5 billion.

Pulitzer announced in November it was considering a possible sale or other options to bolster shareholder value. In announcing its fourth-quarter earnings, the company said Monday that "no formal decisions have been made, and no agreements have been reached at this time." There's no guarantee a sale even might take place, the company said then.

Pulitzer did not reply to requests for comment about the ESOP initiative.

"Though we're interested in making a bid for the entire company, what motivates us is the entity that is the St. Louis Post-Dispatch," said Bill Freivogel, the 1,500-employee newspaper's deputy editorial page editor. "We work at this newspaper because this Pulitzer tradition actually means something to us, and that's something we want to preserve."

While acknowledging that time is tight -- some published reports suggested that the deadline for bids passed on Monday -- the group can't offer a bid until Pulitzer honors its requests to turn over its financial records already supplied to other suitors, Freivogel said Thursday.

"We have not had a response yet," he said.

In forming an ESOP, he said, the group also must get approval from Pulitzer itself.

In a question-and-answer section of the memo, organizers wrote that in conversations that included a large bank, "we've been assured that financing is available." Those behind the effort also hope that at least one existing major shareholder retains his or her stock during the transition to employee control, "but we are also actively exploring possible outside equity investors who would not jeopardize the newspaper's editorial independence," the memo read.

"I'd be exaggerating to say we have all the financing in place," said Freivogel, who has been at the paper for 33 years.

Decisions about Pulitzer's future rest largely with members of the Pulitzer family, who have a controlling interest in the company.

A.G. Edwards & Sons Inc. analyst Mike Kupinski called the ESOP an "11th-hour type of move," given reports that the deadline for bids already has come and gone.

The memo's authors said "we have stressed to management and the board that this is not in any sense a hostile initiative, that we welcome their participation in development of this proposal and in the company's future operation."

In addition to the Post-Dispatch, Pulitzer's holdings include the Arizona Daily Star in Tucson, a dozen other daily newspapers, the Suburban Journals of Greater St. Louis and a group of 37 weekly papers and niche publications.

Joseph Pulitzer settled in St. Louis in 1868. He bought the Post in 1869 and the St. Louis Dispatch in 1878, merging the two newspapers.