Hearst Corp., owner of the Chronicle, plans to pay $299.35 million for a 30 percent stake in MediaNews Group’s publications outside the Bay Area, according to documents MediaNews filed with the Securities and Exchange Commission.
On Aug. 2, a partnership controlled by MediaNews bought the San Jose Mercury News and Contra Costa Times, giving it 11 dailies in the Bay Area. On the same day, Hearst bought the Monterey Herald and St. Paul (Minn.) Pioneer Dispatch for $263 million and turned over the management of those papers to MediaNews, headed by Dean Singleton and Richard Scudder. The plan was for Hearst to give the Monterey and St. Paul Papers to MediaNews in exchange for stock in MediaNews’s non-Bay Area publications.
But the U.S. Justice Department’s antitrust division, concerned about whether the deal would create a monopoly, delayed the closing of the deal twice. Finally, MediaNews changed the proposal and ask DOJ to only approve its purchase of the Merc and Coco Times, putting off approval of the Hearst aspect of the deal for a later date. The change was enough to gain DOJ approval.
Now, in the second phase of the deal, Hearst will buy a 30 percent stake in MediaNews’s non-Bay Area papers by giving MediaNews the Press, Herald and about $36 million cash.
The Hearst part of the deal still requires DOJ approval, however. San Francisco real estate developer and political powerbroker Clint Reilly has said through his attorney that he will seek another injunction to stop this deal. Reilly was unsuccessful in convincing a judge to stop the sale of the Merc and Coco Times. No date for a closing on this second part of the deal was given.
[Documents filed by MediaNews with the SEC including a description of the transaction, the stock purchase agreement and details on MediaNews’s financing]