Sun-Times Media To Sell Chicago Paper

An empty Chicago Sun Times newspaper box sits empty under rival Chicago Tribune's box in downtown Chicago, Thursday, Dec. 13, 2007. Conrad Black took a parting shot at those running his old newspaper company as he was sentenced to prison this week, citing the "evaporation" of $1.85 billion of shareholder value since he was ousted. The remark rankled some but served to underscore the ongoing struggles of the remnants of his one-time empire, Sun-Times Media Group Inc., now striving to return to profitability amid bleak industry conditions and facing a potential sale or breakup. (AP Photo/Charles Rex Arbogast)[ AP Photo/Charles Rex Arbogast

Sun-Times Media Group Inc., parent of the Chicago Sun-Times, put the city's second-largest daily and "any or all" of the company's assets up for sale Monday amid a crippling decline in advertising and revenue at its newspapers.

The company said its board of directors also is looking at other strategic alternatives to increase shareholder value, including joint ventures or strategic partnerships.

But a sale has been, and remains, widely expected. Key shareholders in the struggling company, which also owns dozens of smaller Chicago-area papers, have been pushing for its sale to boost a badly lagging stock price caused by the industrywide loss of readers and advertisers to the Internet.

To strengthen its attractiveness to prospective buyers, Sun-Times Media has been slashing costs for the past two months in order to lower annual operating costs by $50 million.

Chief Executive Officer Cyrus Freidheim touted the company's "solid portfolio" of publications and Web sites, which he said deliver high-quality journalism and great value to advertisers.

"The steps that we've taken in the past year are designed to make sure that this is true today and will continue into the future," he said in a statement. "Our board's decision to explore strategic next steps now is the right thing to do to ensure the future of the Sun-Times Media Group publications and Web sites and to generate the highest value for our shareholders."

The company said the board has established a committee comprised of directors Gordon Paris, Graham Savage and Raymond Seitz to oversee the strategic process, with Seitz serving as the panel's chairman.

Boston-based K Capital Management, the company's largest shareholder with a nearly 10 percent stake and the most vocal advocate of a sale, applauded the announcement.

"Sun-Times owns very attractive community newspapers but is too small to operate as an independent public company," said Chief Investment Officer Abner Kurtin in an e-mail. "The assets have more value to a buyer then they do as an independent company."

Shares in Sun-Times have lost 80 percent of their value since reaching their 52-week high of $6.94 last April. The stock fell 2 cents to $1.38 in Monday trading before the company's announcement.
By Dave Carpenter
  • CBSNews

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