Sun-Times Media says newspaper is for sale

Sun-Times Media Group Inc., under pressure from investors to seek a buyer, said Monday it is exploring options that may lead to a sale of the newspaper publisher.

The company's board formed a committee to study alternatives, including joint ventures, partnerships or a sale, Chicago-based Sun-Times said today in a statement. Chairman Raymond Seitz and directors Gordon Paris and Graham Savage were named to the committee.

Investors led by K Capital Partners, the company's second-largest shareholder, have pushed for a sale of Sun-Times Media.

"Sun Times has a valuable collection of community newspapers but should not be an independent public company," K Capital Partner Abner Kurtin said. "We hope a sale of the company or its assets can be completed by the end of 2008."

Sun-Times Media fell 2 cents, or 1.4 percent, to $1.38 Monday in New York Stock Exchange composite trading. The shares have fallen more than 90 percent since April 2004.

Sam Zell's Tribune Co., owner of Sun-Times competitor Chicago Tribune, may be a buyer for all or part of the company, said Charles Wrubel, managing partner of AdMedia Partners, a New York consulting and investment banking group.

"Zell should be the most logical buyer, but Tribune does have its own challenges," Wrubel said.

Tribune spokesman Gary Weitman declined to comment. The company was taken private in December in a transaction led by Zell that left it with about $12 billion in debt.

A sale to Zell would likely raise questions about media consolidation in Chicago, said Andrew Schwartzman, president of the Washington-based Media Access Project, a group that has opposed companies owning newspapers and TV stations in the same market.

The publisher of the Chicago Sun-Times newspaper and a chain of suburban publications was once controlled by Conrad Black. Black, 63, was convicted in July of mail fraud and obstruction of justice and is due to start a 6½-year prison term on March 3.

Sun-Times reported a loss of $98.2 million through the first nine months of 2007. Advertising sales fell 10 percent during that same period to $214.9 million.

Sun-Times in December said it would cut $50 million in costs by June. Last month, it eliminated 36 newsroom jobs at the Sun-Times newspaper through buyout and layoffs, and closed three urban weeklies and sold three others to reduce expenses. The size of its flagship newspaper and some suburban publications was also reduced to save money.