Some of the nation's largest communications companies may be angling for a chance to acquire one of the few remaining family-owned newspapers--the Minneapolis Star & Tribune--even though the paper isn't for sale.
Gannett Co., publisher of USA Today and the nation's largest newspaper chain, said Friday that it had made a bid to buy about 13.8% of the Star & Tribune's parent company, Cowles Media Co., which also owns the Rapid City Journal in South Dakota, the Great Falls Tribune in Montana, the South Idaho Press in Burley and a group of suburban newspapers in Denver.
Wall Street analysts said they believe that Washington Post Co., which last week acquired 17% of Cowles from a disgruntled Cowles family member, also is bidding against Gannett for the same 13.8% share.
Other Possible Bidders
Among other possible bidders mentioned in the speculation are New York Times Co. and Times Mirror Co., publisher of the Los Angeles Times. Spokesmen at both companies said they could neither confirm nor deny their companies' interest.
"Whoever gets those shares could be in a strong position to take over Cowles eventually," said John Morton, a newspaper industry analyst with the Washington brokerage firm of Lynch, Jones & Ryan. "And if you didn't get the company in the end, you would probably be able to sell off those shares to whoever did at a handsome profit."
The 13.8% of Cowles for which the companies are thought to be bidding is the last remaining asset of Des Moines Register & Tribune Co., another newspaper company owned by heirs of the Cowles family, which was liquidated in January after a fragile alliance of family owners began to crumble.
In the final stages of liquidating the Register company, the investment banking firm of First Boston Corp. last week accepted informal bids for the 13.8%. Those bids are to be discussed Monday at a meeting of outside Register directors supervising the dissolution.
Although Gannett is the only company to publicly confirm it has made an offer, the word on Wall Street is that several other companies are interested.
Jefferey Epstein, an investment banker at First Boston involved in the dissolution, said the outside directors could recommend selling the shares or devising some system to allow current Register & Tribune shareholders to keep the stock themselves. Some of those shareholders are executives in Cowles Media.
Interest in the shares intensified one day before bids were due when Washington Post Co. announced that it was acquiring 17% of Cowles Media from Kingsley H. Murphy and his family. Murphy is a Cowles heir who had wanted to sell his stake in the company since last November. Although terms were undisclosed, documents filed in a lawsuit by Murphy against Cowles Media reportedly said the Post had made a preliminary offer in January of $45 million to $60 million for the 17%, or $85 to $113 a share.
Wall Street analysts speculated that the Post paid almost $100 a share.
With 17% in hand, the Post would control nearly 31% of Cowles stock if it also were to acquire the 13.8% owned by the Register company. Such holdings would put the Post in a strong position to acquire control of Cowles if the family trust began to come apart, said J. Kendrick Noble Jr., a securities analyst with the New York brokerage firm of Paine Webber Mitchell Hutchins.
Bought as 'Investment'
Wall Street analysts and newspaper industry sources said they understand that the Post also bid for the 13.8%, along with several other newspaper companies. Post spokesman Chip Knight declined to comment on those reports, saying only that the Post had acquired the initial 17% of Cowles "as an investment."
In order to stop a takeover by the Post or anyone else, Cowles executives--led by Chairman David Kruidenier--altered the structure of the Cowles family trust in January. They expanded the voting trust from 13 people controlling 44.6% of the stock to 25 people controlling more than 50%.
Kruidenier, however, also had attempted to keep control of Register & Tribune Co., where he also held the post of chairman. His efforts in Des Moines proved futile when the bidding for the company rose to such a point that the family agreed to sell off the company in parts.