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McClatchy snags Cowles
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November 14, 1997: 7:17 a.m. ET
Family-owned newspaper chain's $1.4B bid is unexpected winner
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NEW YORK (CNNfn) - McClatchy Newspapers Inc. has reached a deal to acquire closely-held Cowles Media Co. for about $1.4 billion.
McClatchy was not expected to win the chain. When the company was put up for sale a couple of months ago, most in the industry expected either Gannett Co., Tribune Co. or the Washington Post Co., which owns 28 percent of Cowles, to eventually snag the chain.
The cash and stock deal will create a newspaper and magazine company with more than $1 billion in annual revenue and $300 million in expected cash flow. It will also enhance McClatchy's existing online publishing operations and take it into a new region of the United States.
A minimum of 75 percent and maximum of 85 percent of Cowles shared will be exchanged for $90.50 a share in cash. The remaining 15 to 25 percent of Cowles stock will be exchanged for $90.50 in McClatchy shares. The minimum exchange ratio would be 2.6882 McClatchy shares and the maximum 3.016 shares.
McClatchy, which posted 1996 revenue of about $624 million, publishes 10 dailies and 13 weekly papers, including the Sacramento Bee, the News and Observer in Raleigh, N.C. and Alaska's Anchorage Daily News.
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