The liquidation of Des Moines Register and Tribune Co. could net between $335 million and $345 million when all the firm`s properties are sold, the company has told stockholders.
In proxy materials mailed to stockholders for a July 1 special shareholder meeting, the Iowa company also said that Gannett Co. has agreed to pay $56 million, or about $130 a share, for Register and Tribune`s 430,636 shares of stock in Cowles Media Co. of Minneapolis.
Gannett, the nation`s largest newspaper chain, previously agreed to buy the Iowa firm`s newspaper properties, including the Des Moines Register, but the final price is still being hammered out.
The agreement to sell the 14 percent stake in Cowles Media stock to Gannett was reached last Thursday and ends two months of negotiations between the firms.
According to the proxy, Gannett would pay Register and Tribune an unspecified additional amount if, prior to March 31, Gannett pays more than $130 a share to acquire more Cowles Media stock or if it sells the stock it is buying from the Iowa firm for more than $130 a share.
Gannett is slated to close on the newspaper and stock deals in July.
Cowles Media, which publishes the Minneapolis Star and Tribune, is controlled by the Cowles family, which also controls Register and Tribune. Earlier this year, Washington Post Co. acquired a 17 percent stake in Cowles Media from a shareholder.
According to sources, the Post paid $105 a share for that block.
The sale of all Register and Tribune properties is expected to net between $299 and $309 a share. The distribution to shareholders will be reduced by fees and expenses.
In the limited public market for Register and Tribune shares, the stock had been selling for around $35 before an unsolicited $100-a-share bid was made for the firm last fall. The Cowles family later decided to sell the firm`s assets and to liquidate the firm.
The company is asking shareholders to approve the liquidation plan at the July 1 meeting.
The Iowa newspapers will carry a purchase price of $165 million, but the proxy explains that negotiations regarding certain tax liabilities probably will cut the net proceeds to $154 million to $158 million. Gannett is to pay about $40 million for the Jackson, Tenn., Sun.
According to the proxy, Chicago-based Burnham Broadcasting Co. is to acquire Register and Tribune`s two Hawaii TV station for $46 million to $47 million. That is lower than the price of $50 million to $55 million that had been mentioned in speculation when the deal was announced on Feb 7.
The Des Moines firm estimates that WQAD-TV in Moline, Ill., will be sold for $25 million to $26 million to New York Times Co.; two Madison, Wis., radio stations will be sold for $5.5 million to $6 million to Price Communications Corp.; and two Portland, Ore., radio stations will be sold for $5.5 million to $6 million to Ackerley Communications Inc.
