Signature has Taylor moving ahead with Star Tribune deal

Sale to billionaire should close around June 30, publisher says.

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Glen Taylor

Photo: Renee Jones Schneider, Star Tribune

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Glen Taylor’s effort to purchase the Star Tribune moved forward Wednesday with the signing of a purchase agreement between the Minnesota billionaire and the media company.

Star Tribune Publisher Mike Klingensmith called the agreement an “important milestone” and said he expects the sale to close around June 30.

“Work remains to be done, but we are increasingly confident of closing this transaction,” Klingensmith said.

The Star Tribune, the state’s largest media company, would join Taylor’s portfolio of more than 80 businesses worldwide. They include the Minnesota Timberwolves and dozens of companies in printing and other industries.

Taylor has said he will pay around $100 million in the deal. He could not be reached for comment Wednesday. Klingensmith declined to discuss details of the agreement, other than to say that they haven’t changed since both parties signed a letter of intent for a possible purchase almost two months ago.

“That’s significant,” Klingensmith said, “because as [Taylor’s representatives] go through due diligence, they thoroughly review our financials and look at our records and our contracts.”

At this point, Klingensmith added, the only thing that could sink the deal is a “material adverse change.”

The largest shareholders in the Star Tribune are Wayzata Investment Partners and GE Capital, which together own about 75 percent of the shares. The rest of the stock is owned by several dozen former creditors and other investors. Taylor’s offer is for 100 percent of the shares.

Pivotal moment

The sale would be a pivotal moment for the Star Tribune, which emerged from bankruptcy in 2009 with the challenge of reinventing itself for a digital audience while also publishing a strong print edition. Since then, the company has expanded its readership and stabilized its finances. The newspaper won two Pulitzer Prizes in 2013.

The company also has reduced a significant amount of debt, partly through the recent $38.5 million sale of five blocks it had owned in downtown Minneapolis. The land sale cleared the way for a $400 million office tower project near the new Vikings stadium, which is under construction.

Taylor, 73, has said he will not take a managing role with the Star Tribune, although he might put a family member on its board of directors. The company’s current management would remain in place.

Joel Kramer, a former publisher of the Star Tribune who is now the CEO and editor of MinnPost, said he was optimistic about the purchase because Taylor is a “local owner with deep pockets” who wants to retain Klingensmith.

“It’s a sign that he knows as an owner he needs a good manager to run it,” Kramer said.

Kramer credits Klingensmith, a former Time Inc. executive who grew up in Fridley, with stabilizing the Star Tribune’s revenue in a struggling industry while staying committed to good journalism, a balance that has proved difficult.

Ken Doctor, a news industry analyst at Newsonomics, said Taylor appears to have strong civic instincts and a long-term perspective regarding the Star Tribune. He is the right kind of owner for a newspaper in a shifting marketplace, Doctor said.

“It’s going to be bumpy the next three to five years — there are so many transitions in the news business,” he said. “It helps to have owners that aren’t skittish and hopefully would be willing to forgo some short-term profit if that’s necessary.”

McClatchy Co. bought the Star Tribune from the Cowles family in 1998 for $1.2 billion, which adjusted for inflation would be $1.74 billion today. When Avista Capital Partners bought the paper from McClatchy in 2006, the price had fallen to $530 million. That deal weighed the company down with debt just before the worst economic downturn since the Great Depression, contributing to the 2009 bankruptcy.

  • Star Tribune purchase agreement signed

    Glen Taylor and the Star Tribune signed a purchase agreement Wednesday; the estimated $100 million sale is expected to close June 30.

    Star Tribune

    Headquarters: Minneapolis.

    Audience: 1.4 million adult readers weekly in print and online. U.S. circulation rank: seventh Sundays, 12th daily.

    Employees: 1,140.

    Founded: 1867.

    Chairman: Mike Sweeney.

    Publisher: Michael Klingensmith.

    Editor: Rene Sanchez.

    Glen Taylor

    Age: 73.

    Home: Mankato.

    Education: Minnesota State University, Mankato, B.S., 1962.

    Career: Chairman and CEO of Taylor Corp., 1975 to present.

    Politics: Republican state senator, 1981-1990; Senate minority leader, 1984-86.

    Wealth: $1.8 billion (Forbes estimate, March 2014).

    Taylor Corp: Interactive, printing and marketing services with annual revenue of $1.6 billion. More than 50 companies employ more than 9,000. Subsidiaries in the United States, Canada, Mexico, United Kingdom, France and China.

    Other holdings: Owner, NBA’s Minnesota Timberwolves (since 1995) and WNBA’s Minnesota Lynx (since 2002). Interests in other businesses include: Northland Securities Inc., a Minneapolis securities brokerage firm; Rembrandt Enterprises, an Iowa egg producer, and Envoy Medical, a St. Paul maker of implantable hearing devices.

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