ST. LOUIS - Shares of Pulitzer Inc., owner of the St. Louis Post-Dispatch and 78 other newspapers, rose more than 17 percent after the company said it's considering a sale.
The company may sell for as much as $1.5 billion, and Gannett Co., the largest U.S. newspaper publisher, could be a leading candidate to buy it, said Barry L. Lucas, an analyst with Gabelli & Co., which owns Gannett shares.
Pulitzer's 14 daily and 65 weekly newspapers are located primarily in mid-size and small U.S. cities such as Bloomington, Ill., and Provo, Utah, which makes the company attractive to a range of suitors, said Lucas. They could include Tribune Co., Knight-Ridder Inc., Belo Corp. and the New York Times Co., along with Gannett, he said.
"Gannett is already a partner of Pulitzer in a Tucson venture, and they're well-financed and well-heeled," said Lucas, who doesn't own shares of Pulitzer. Pulitzer's Arizona Daily Star operates jointly with Gannett's Tucson Citizen.
Gannett spokeswoman Tara Connell declined to comment.
Shares of Pulitzer rose $9.44, or 17.2 percent, to close at $64.25 yesterday on the New York Stock Exchange, after touching $64.75.
Pulitzer was founded in 1878 by Joseph Pulitzer, the son of a grain dealer who became a reporter and bought newspapers including the St. Louis Post. The papers specialized in so-called yellow journalism, publishing crusades against government corruption, gambling and tax fraud.
Pulitzer's descendants control the company with 88 percent of the voting shares.
Emily Rauth Pulitzer, the widow of Joseph Pulitzer Jr., holds 192,500 shares of the company's common stock and 6.3 million Class B shares. Michael Pulitzer, the company's chairman and grandson of the founder, holds 352,300 shares of the common stock and 1.55 million Class B shares, according to a Securities and Exchange Commission filing.
The company could fetch as much as $70 a share, said Lucas. Pulitzer had $42.2 million in net income last year on $422.7 million in revenue.
Gannett, publisher of USA Today, agreed last week to acquire HomeTown Communications Network Inc. to add community newspapers, directories and shopping guides in Michigan, Ohio and Kentucky. Gannett also has 100 other daily U.S. newspapers and 21 television stations, including KSDK-TV in St. Louis.
Lauren Rich Fine, an analyst at Merrill Lynch & Co. Inc., expressed surprise about the timing of Pulitzer's announcement in light of uncertainty about federal rules governing media ownership.
"It is not obvious to us that a sale will be easy," she said in a report yesterday.
In June 2003, the Federal Communications Commission approved rules that allow media companies to own both a newspaper and TV station in the same large city. Those rules were blocked by a federal appeals court in June and sent back to the FCC for review.
FCC Chairman Michael K. Powell has said the agency hasn't decided whether to appeal the court decision to the Supreme Court, or when the agency might begin a review of the rules.
Tribune, which owns The Sun, the Los Angeles Times and Chicago Tribune, owns a TV station in St. Louis, and Belo, publisher of The Dallas Morning News, owns TV stations in Tucson and St. Louis.
