Pritzkers Try Their Magic Touch on Seatrain

The patriarch of the super-rich Pritzker family of Chicago reportedly once proclaimed: “On Saturdays, a good Catholic goes to confession. I go to the First (National Bank) of Chicago.”

A. N. Pritzker, who died last February at age 90, started buying real estate in the 1930s and built a diversified empire with the help of his sons Jay and Robert, who have built their own reputations as turnaround specialists.

This week, in the latest of a series of eclectic deals, it was revealed that the Pritzkers’ McCall Publishing unit is expected to be sold for roughly $300 million in notes and stock to New York-based Seatrain Lines, a former shipping company that is about to emerge from five years of bankruptcy protection after selling nearly all its assets. In exchange for McCall’s and $10 million in cash, the Pritzker family will get a large minority stake in Seatrain, three seats on the board and the right to “consult” on who is elected to two other seats on the nine-member board. (The other four are management nominees.)

“The objective is to build Seatrain through further acquisitions with the acquisition expertise of the Pritzkers,” said Jerry M. Seslowe, managing director of Resource Holdings Ltd., a New York investment firm that put the transaction together.

Seatrain, whose plan of reorganization will be reviewed by a bankruptcy judge in New York on Dec. 2, has only three oil tankers and about $300 million in tax-loss carryforwards. The reorganization plan must be approved, and Seatrain must emerge from Chapter 11 bankruptcy before the transaction can take place. But “the deal between Seatrain and McCall’s is pretty definite,” Seslowe said.

The Pritzkers have no comment on the proposed transaction, said an assistant to Jay Pritzker, who is recovering from heart surgery and was not available. Seatrain officials were also unavailable for comment.

McCall Publishing’s best-known magazine is 110-year-old McCall’s, which was struggling when the Pritzkers bought it for $8 million in 1973.

Although McCall’s circulation has slipped in recent years, the magazine is profitable and worth, by one estimate, more than $150 million. McCall’s average circulation was nearly 5.3 million for the six months ended June 30, down from 6.2 million in the same period of 1985.

The company also publishes Working Mother--one of the “new woman” magazines that has stolen readers from and influenced the format of traditional women’s magazines such as McCall’s--and Baby magazine as well as various beauty and cooking supplements to McCall’s.

The Pritzkers also own controlling stakes in Hyatt Hotels, which operates 81 domestic hotels; Hyatt International, which operates 41 hotels in 25 foreign countries, and Braniff International. In addition, they have interests in casinos, timberlands and the San Francisco investment firm of Montgomery Securities.

Beyond the flashy investments, the core of the Pritzker empire is Chicago-based Marmon Group, a closely held umbrella for nearly 65 manufacturing companies with sales of about $3 billion and net income of about $100 million. Marmon, headed by Robert Pritzker, owns such diverse companies as one of the nation’s largest consumer credit information services, a company that makes automobile springs and an English firm that produces hats to grace Princess Diana’s head, among others.

Jay Pritzker, 64, trained as a lawyer like his father, is the “wheeler dealer” who buys ailing firms at low prices while 60-year-old Robert, an engineer, revives the companies, Seslowe said.

“They’re really in many diverse areas, and they’re very brilliant people,” he said.

Melvyn N. Klein, a longtime friend and business associate of Jay Pritzker, called the financier “exceptionally bright. He is a person of his word. He’s just had a tremendous record in business and anything else.”

The family came very close to its first public failure a few years ago when it bailed out Braniff in 1983 with a $70-million cash infusion. But despite the doubts, even that once-bankrupt operation expects to turn a slight profit this year.

“Anyone that’s bet against Jay Pritzker has lost,” said Klein, a Corpus Christi, Tex., lawyer and business executive.

The Pritzker family’s net worth is estimated by Forbes magazine at $1.5 billion, and many of the members of the close-knit clan can be found working in family enterprises.

But not all. For example, MCA Records just released an album by Idle Tears, a band featuring Dan Pritzker, Jay’s son.