Shareholder Seeks Controlling Interest in Star Tribune

Wayzata Investment Partners, which owns 49.8 percent of the media company, is seeking to buy some shares from another investor, thus increasing its stake to 58.2 percent.

The Star Tribune on Tuesday reported that its largest shareholder, Wayzata Investment Partners, has proposed buying a controlling stake in the newspaper's Minneapolis-based holding company, The Star Tribune Media Company.

Wayzata, which currently owns a 49.8 percent stake in the company, is reportedly seeking to buy 128,951 shares of Star Tribune stock from another shareholder, Switzerland-based Credit Suisse, for $32 per share. The deal would reportedly increase Wayzata’s stake in the company to 58.2 percent.

However, under the company’s stockholders agreement, if a supermajority of Star Tribune shareholders—those who hold at least 66.66 percent of the remaining shares not involved in the proposed deal—object, the purchase would not occur, and Wayzata would instead have the option to make a tender offer of at least $32 per share to all Star Tribune stockholders, the newspaper reported.

Based on the price of $32 per share and share information included in a letter that Star Tribune Chairman Michael Sweeney sent to shareholders, the media company’s equity would reportedly be worth about $49 million, while its “enterprise value”—which takes into account the company’s debt—would be about $120 million. However, in his letter, Sweeney advised shareholders not to assume that the $32 per share price “represents anyone’s view of the company’s value in a sale of the entire company, or otherwise.”

Since emerging from bankruptcy in September 2009, the majority of the company has reportedly been owned by its former creditors, and no individual group has held more than 50 percent of its stock.

“Clearly, [Wayzata’s decision to up its stake] is a sign that investors who have been with us for the last three years continue to see value investing in the Star Tribune,” Sweeney reportedly said in an interview.

Wayzata’s purchase offer comes shortly after approval was granted for a new $975 million Vikings stadium to be built in downtown Minneapolis, plans for which reportedly include a block of land that is owned by the Star Tribune. The new stadium will likely boost the value of other nearby land that the company owns, according to the newspaper's report.

Wayzata Investment Partners is a private equity firm that spun out from Cargill in 2004. The firm reportedly has interests in businesses including casinos and restaurants.

To read the full Star Tribune report, click here.