Equity Group to Buy Minneapolis Paper

12/27/2006

Associated Press
Wednesday, December 27, 2006


MINNEAPOLIS, Dec. 26 -- The Star Tribune, the largest newspaper in the McClatchy chain, said Tuesday it was being sold to a private equity firm for $530 million.


McClatchy said it agreed to sell the newspaper to Avista Capital Partners through a private bidding process "after a strategic reevaluation of its portfolio of holdings" that followed McClatchy's purchase this year of Knight Ridder, a rival chain, for $4.5 billion.


The sale price is much lower than the $1.2 billion McClatchy paid to buy the Star Tribune from Cowles Media in 1998.


McClatchy's chairman and chief executive, Gary Pruitt, said in a statement that the Star Tribune "is a profitable business that has generated significant returns for the company over the years. However, as we continue to analyze our business following the Knight Ridder acquisition, it became clear that selling the Star Tribune strengthens McClatchy's competitive position."


Avista does not own any other daily newspapers. It was founded in 2005 by seven former partners and nine former professionals from DLJ Merchant Banking Partners, the private equity affiliate of Credit Suisse Group, according to the statement announcing the sale.