Bass Ends Fight for St. Petersburg Times : Media: The paper agreed to end a disputed class of preferred stock and to pay higher dividends.

An investor group led by Texas billionaire Robert M. Bass has agreed to drop its two-year fight for control of the prestigious St. Petersburg Times newspaper, the two sides announced Friday. Bass will begin selling some of his 40% stake in the paper’s common stock for an undisclosed price.

Although financial terms of the settlement are secret, the announcement said the newspaper agreed to do away with its disputed class of preferred stock, which, Bass charged, unfairly received 86% of the paper’s dividend income. The paper also will start paying, over a five-year period, a “substantially” higher dividend on its common shares--the type that Bass owns. Both of the moves were among the demands that Bass sought in a lawsuit filed earlier this year.

In exchange, Bass agreed to drop the suit, sell management an undisclosed amount of his common and grant the newspaper voting rights over any remaining portion he holds.

Within three years, Bass also may sell the newspaper additional shares of his common stock.

“I have not had a complete or peaceful night’s sleep in two years,” said Robert Haiman, president of the Poynter Institute for Media Studies, which owns part of the newspaper, “but tonight I intend to sleep like a baby.”

Andrew Barnes, chairman and editor of the newspaper, said: “The agreement assures the long-term independence, journalistic control and competitive vigor of the St. Petersburg Times. While the Times is incurring some debt, it will in no way interfere with our operations, our staffing, our affiliates or our growth.”

David Bonderman, chief operating officer of the Bass group, is described in the settlement statement as believing that the deal “is in everyone’s best interests.”

Most analysts believe that Bass probably will come away with a handsome profit on the shares he bought in 1988 from the nieces of the paper’s guiding spirit, Nelson Poynter. Most estimates are $35 million to $50 million.

John Morton, a newspaper analyst who heads Morton Research, said that based on revenue estimated at $200 million, the paper is probably worth $700 million to $800 million.

Bass earlier this year said the value was at least $450 million.

Even when you discount the value of Bass’ common stock because it is a minority share, Morton said, the stock is worth $150 million to $200 million. “I would not be surprised if he doubled his money,” Morton said--or possibly did far better than that.