Seacrests to take $59 million in Lee stock for Nebraska paper;
Capital Cities/ABC may sell its New England Island papers sp.
TRADING IN NEWSPAPER companies is getting off to an active start this year, with the announcement this month of two sizable transactions and other deals in the offing.
Knight-Ridder Inc. said it has agreed to sell the Journal of Commerce (JOC), the 21,000-circulation business daily based in New York, to the corporate parent of Britain's Economist magazine for $115 million, double Journal of Commerce Inc.'s annual revenue of about $60 million.
Besides the 168-year-old JOC, which generates 40% of the company's revenue, the deal includes Florida Shipper, Gulf Shipper and Traffic World magazines, plus industry directories and PIERS, an electronic information service that reports shipping manifests.
And in Lincoln, Neb., the Seacrest family agreed to sell its majority interest in Journal-Star Printing Co. ? publisher of the 41,000-circulation Lincoln Star, 39,000-circulation Lincoln Journal and 85,000-circulation combined Sunday edition ? to Lee Enterprises Inc. for $59 million worth of Lee stock.
Lee already owns the Star and a minority of the operating company. The Seacrest family owns the Journal and the controlling interest in the operating company.
The JOC deal, subject to final terms and approval of both companies' boards, is expected to close in April. It would give the Economist Group, parent company of the U.K. business magazine, a larger U.S. presence than that afforded by its current holdings, the business magazine CFO and the Capitol Hill weekly Roll Call. The Economist, in turn, is 50% owned by Pearson PLC, publisher of the Financial Times.
Knight-Ridder chairman and CEO James K. Batten said his company's new strategy "moves us away from the specialized market that the Journal of Commerce serves. We cannot devote to its continued development the resources that we would like and that it deserves."
Knight-Ridder, whose 29 dailies with 3.7-million circulation make it the nation's second biggest newspaper publisher, said it would use the proceeds to reduce debt and to buy its own shares. Ridder Publications acquired the JOC in 1927, before the 1974 merger that created Knight-Ridder.
JOC publisher Don Becker said the company, which was losing money when he took over in 1985, currently earns double-digit profit margins. It employs about 550 people, including 80 journalists.
Becker said the Economist hopes to expand in the trade and transportation field. He said ties between the two companies could include joint selling of products.
The paper is seeking an editor to replace Scott Bosley, who left to become publisher of Knight-Ridder's Gary, Ind., Post-Tribune.
Meanwhile, halfway across the country in Lincoln, Neb., Mark Seacrest, president of Journal-Star Printing Co. and president of the Journal, said his family's Journal Limited Partnership has agreed to the tax-free trade for Lee stock to diversify family assets in the interest of future generations. At the same time, the family remains in newspapers.
The 49-year-old manager is a fourth-generation family member, and the only one active in the business.
"I don't see a strong interest in the fifth and sixth generations to come into the family business," he said. When the deal closes, set for March 31, Seacrest will give up his job.
The sale includes the Journal and the Seacrest family's 50.25% stake in Journal-Star Printing.
Lee acquired the Star in 1930 from the Gooch family, and the two papers combined noneditorial operations in 1950. Currently, the separate and competing newsrooms furnish content on contract to Journal-Star Printing, which publishes daily editions and the Sunday combined paper.
When the deal closes, the Seacrests will own about 7% of Lee, the publicly traded company, based in Davenport, Iowa, that owns 19 newspapers, eight TV stations, and the printing plate manufacturer NAPP Systems Inc.
Ron Rickman, Lee's vice president for newspapers, said no immediate changes were planned for the newspapers' 450 employees, including about 100 journalists.
Regarding the obvious likelihood of merging the two papers ? in keeping with the decades-long national trend ? Lee president and CEO Richard Gottlieb said any changes "will not be rushed" and will be made to improve service.
In a pending sale agreement, the New England Press Association's newspaper reported that a deal is expected to be complete by March for Capital Cities ABC/Inc. to sell one daily, the Milford (Conn.) Citizen, and 50 weeklies and shoppers in New England.
The report, quoting an anonymous source involved in the talks, said Journal Register Co. would acquire Capital Cities/ABC's Connecticut and Rhode Island properties, while Fidelity Capital would buy the Massachusetts holdings.
Capital Cities/ABC senior vice president, and president of its publishing group, Phil Meek, said his company has talked to both companies, among others, but called the report "speculative."
The properties, including eight companies, have been for sale since last August, he said, but no agreements have been reached.
Journal Register chief Bob Jelenic declined to comment.
?(The new strategy "moves us away from the specialized market that the Journal of Commerce serves. We cannot devote to its continued development the resources that we would like and that it deserves.") [Caption]
?(-James K. Batten, Knight-Ridder chairman and CEO) [Photo]
By: George Garneau Knight-Ridder to sell Journal of Commerce for $115 million;