Posted on: Saturday, June 4, 2005
New owner takes over Pulitzer's newspapers
By Jim Salter
Associated Press
ST. LOUIS — Lee Enterprises Inc. yesterday completed its $1.46 billion purchase of fellow newspaper publisher Pulitzer Inc., closing the books on a family-run company founded 127 years ago.
Shareholders of St. Louis-based Pulitzer gathered in New York, where they approved the merger announced in January. Lee shareholders earlier agreed to the deal that will create the nation's seventh-largest newspaper company in terms of circulation and fourth-largest in terms of number of newspapers.
Lee agreed to pay $64 in cash for each Pulitzer share, about a 15 percent premium over where the stock was trading last November when the company put itself up for sale. Lee also will assume $306 million of Pulitzer debt.
By adding Pulitzer's St. Louis Post-Dispatch, the Arizona Daily Star, the Garden Island on Kaua'i, 11 other dailies, the Suburban Journals of Greater St. Louis and other publications, Davenport, Iowa-based Lee will own 52 daily newspapers and a joint interest in six others. It also will publish more than 300 weekly newspapers, shoppers and specialty publications.
The company's newspapers will have combined circulation in 23 states of 1.7 million daily and two million Sunday. The combined business will have revenue of $1.1 billion based on 2004 figures.
"This is a terrific acquisition that extends Lee into more growth markets with quality newspapers staffed by talented people," Mary Junck, Lee's chairman, president and chief executive said in a news release.
Lee also announced that Post-Dispatch publisher Terry Egger will become a vice president of the company. He became general manager of the Post-Dispatch in 1996 and publisher of the newspaper in 1999.
Pulitzer chose Lee over Gannett Co., the nation's biggest newspaper publisher whose 101 U.S. newspapers include USA Today and The Honolulu Advertiser.
Lee and Pulitzer have said the deal would mesh two newspaper publishers with similar cultures and values, beginning with their long histories. Lee was founded 114 years ago and Pulitzer dates to 1878, when Joseph Pulitzer merged the St. Louis Dispatch and the Post.
Pulitzer left $2 million to Columbia University when he died in 1911, founding the university's journalism graduate school and funding the Pulitzer Prizes, first awarded in 1917. The Post-Dispatch has won 17 Pulitzers, which will continue to carry that name even as the newspaper company's name disappears.
In 2004, Lee had operating revenues of $683 million and net income of $86.1 million, while Pulitzer had revenues of $444 million and earned $44.1 million. Lee will have 10,700 employees with the addition of about 4,000 Pulitzer workers.
"It's a shame that the Pulitzer name and its reputation is now gone from the American newspaper industry," said Ed Bishop, a professor of journalism at Webster University in suburban St. Louis and editor of the St. Louis Journalism Review.
Bishop also expressed concern about whether Lee will be able to absorb the cost without cutbacks. "If they can do it by increasing revenue like Mary Junck says they will, great," he said. "If they do it the way it's normally done in these acquisitions, by squeezing the newsroom and the news holes, that's not great."
Newspaper mergers have been less frequent since 2000, when Gannett bought Central Newspapers Inc. for $2.6 billion and Tribune Co. agreed to buy Times Mirror Co. for $8 billion.
Pulitzer shares rose 2 cents to $63.98 in afternoon trading on the New York Stock Exchange. Lee shares fell 25 cents to $41.53 on the NYSE, where they have traded between $40.69 and $49.83 over the past year.
