McClatchy to Sell Star Tribune for $530 Million
Newspaper publisher McClatchy said Tuesday it agreed to sell the Star Tribune newspaper in Minneapolis, Minnesota for $530 million to private-equity firm Avista Capital Partners.
The company is selling the paper to reduce debt, improve its financial performance and offer more flexibility to make digital investments and pursue other "new opportunities in the newspaper industry," it said in a statement.
McClatchy said it has no further plans to sell other papers. The sale comes after McClatchy's decision to sell 12 daily papers that it bought in its acquisition of the Knight Ridder newspaper chain for more than $4 billion in June.
One of those papers is the Pioneer Press in Minneapolis' neighboring city St. Paul, which McClatchy agreed to sell to Hearst Corp., to avoid raising U.S. antitrust concerns.
The Star Tribune "is a profitable business that has generated significant returns for the company over the years," McClatchy Chief Executive Gary Pruitt said in the statement.
"However, as we continued to analyze our business following the Knight Ridder acquisition, it became clear that selling the Star Tribune strengthen's McClatchy's competitive position," he added.
A spokeswoman for Avista Capital Partners was not immediately available for comment.
The deal covers the newspaper as well as other publications and Web sites related to the Star Tribune. The transaction is expected to close in the first quarter of 2007, the company said in a statement.
McClatchy bought the Star Tribune from Cowles Media for $1.2 billion in 1998, according to an article published on Tuesday on the newspaper's Web site.
The Star Tribune, like other U.S. newspapers, is losing circulation as readers get their news and entertainment increasingly from the Internet and other media.
The average daily paid circulation of the Star Tribune fell 4.2% to about 358,887 million readers for the six months ended Sept. 30, 2006, from the same period a year ago, according to statistics published by the Audit Bureau of Circulations.
McClatchy expects a future cash tax benefit of about $160 million related to the sale.