By: Mark Fitzgerald K Capital Management LLC is demanding Chicago Sun-Times parent Sun-Times Media Group (STMG) put itself up for immediate sale, the investment management group disclosed in a filing Thursday with the Securities and Exchange Commission (SEC).
K Capital, which says it holds a 9.9% stake in STMG, is also demanding that Chairman Raymond Seitz step down, saying "his personal travel schedule and other interests do not allow him to provide present and active leadership."
The group is also asking for former CEO Gordon Paris to resign from the board. "Mr. Paris was CEO of the company during its deterioration and during its costly decision to invest in Canadian commercial paper; given these facts, there is no justification for allowing Mr. Paris to remain on the board," the filing states. Late last week and again on Monday, STMG disclosed that it has been unable to redeem about $59 million invested in asset-based Canadian commercial paper that has matured.
K Capital also wants STMG to appoint two institutional shareholders to the board to give greater representation to stockholders. And it say the company should spend the remaining money, which it estimated at $20 million, in its stock-buyback program.
K Capital had previously been a passive investor, and by filing a so-called 13D form with the SEC said it wants to change the company.
The group said it believes "the company is trading at a significant discount to its intrinsic value and that immediate action must be taken to preserve shareholder value due to the company's recent operational Deterioration."
An STMG spokesperson said the company had no comment on the K Capital filing.
At midday, STMG shares (NYSE:SVN) were trading at $2.80, up 5 cents, or 1.28%.
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