ST. LOUIS — Lee Enterprises Inc. is buying Pulitzer Inc. — publisher of the St. Louis Post-Dispatch, Provo's Daily Herald and a dozen other daily newspapers — in a $1.46 billion deal that Lee says would give it the nation's fourth biggest roster of daily newspapers.
The nation's biggest newspaper publisher, Gannett Co., said it also had been a bidder for Pulitzer, whose daily newspapers also include the Arizona Daily Star.
Lee and Pulitzer said the deal, unanimously approved by both boards, would mesh two newspaper publishers with similar cultures and values, beginning with their long past. Lee is 114 years old, and Pulitzer dates to 1878, when Joseph Pulitzer merged the St. Louis Dispatch and the Post. Lee currently has 44 daily newspapers in 19 states.
"Today begins a new chapter in the long and storied history of Pulitzer," declared Robert Woodworth, Pulitzer's president and chief executive.
Randy Wright, executive editor of Provo's Daily Herald, a 34,000-circulation newspaper, said Lee is a terrific company and shares a similar philosophy to Pulitzer.
"I think that Lee, like Pulitzer, very much relies on the leaders of local units to conduct business locally," Wright said Monday. "We're ready to take the next step and look forward to continued growth and service to our community."
The Daily Herald has 190 employees and owns several weekly newspapers, including the Lehi Free Press, the Pleasant Grove Review, American Fork Citizen, the Lone Peak Press, the Pony Express, the Orem Geneva Times, Springville Herald, the Spanish Fork Press and the Pyramid.
Lee, based in Davenport, Iowa, said the acquisition will make the company fourth in numbers of U.S. daily newspapers with 58 dailies in 23 states. Gannett is first with 101, followed by Community Newspapers Holdings Inc. with 96 and Liberty Group Publishing with 66, Lee said.
Lee also said it would rank seventh with combined circulation of 1.7 million daily and 2 million on Sundays.
Lee will pay $64 per share in cash for Pulitzer, which also owns more than 100 weekly newspapers, shoppers and niche publications, including the Suburban Journals of Greater St. Louis.
Both companies said they expect to complete the deal, which also includes Lee assuming $306 million of Pulitzer debt, this spring.
Lee executives called the deal a logical extension of its long-term growth plan, following Lee's $694 million acquisition of family-owned Howard Publications in 2002. With Pulitzer, Lee's revenues should rise by 60 percent and circulation by 50 percent, Lee chairwoman and chief executive Mary Junck said.
Pulitzer will become a subsidiary of Lee, which will have 10,700 employees after absorbing Pulitzer's roughly 4,000 workers. Lee also will gain a minority stake in the St. Louis Cardinals baseball team.
In November, Pulitzer said it was considering a possible sale or other options to increase shareholder value.
Tara Connell, a spokeswoman for Gannett, confirmed that the McLean, Va.-based company — which publishes USA Today and 100 other U.S. newspapers — did bid for Pulitzer. She declined additional comment.
Woodworth, during a news conference in his office decorated with portaits and a bust of Joseph Pulitzer, refused to discuss other suitors, saying only that Pulitzer's board "unanimously believed the combination with Lee was the best possible outcome."
Pulitzer shares rose 56 cents to close at $63.46 on the New York Stock Exchange, near the high end of their 52-week range of $43.71 to $65.89. Lee shares rose 64 cents to close at $44.55 on the NYSE, near the bottom end of its 52-week range of $43.43 to $49.83.
Federal antitrust regulators are investigating the deal, Justice Department spokeswoman Gina Talamona said. Investigators also are examining Gannett's purchase of HomeTown Communications Network Inc., a Midwest community newspaper publisher based in Livonia, Mich., and the New York Times Co.'s plans to buy a share of a free Boston daily that competes with the Times-owned Boston Globe.
A.G. Edwards & Sons Inc. analyst Mike Kupinski cheered the hookup given Lee's existing knowledge of Midwest markets as "a well-run company with some of the highest margins" in the industry.
While expecting the selling price to be a bit more than $64 per Pulitzer share, Kupinski called the purchase "a fair deal for the shareholders."
The deal also effectively scuttles a bid by six Post-Dispatch employees who — worried about prospects of an outside suitor — had launched an admittedly longshot effort to buy the company through an Employee Stock Ownership Program, under which all workers could share ownership.
"On balance, this is about as good as it gets," said Jeff Gordon, a Post-Dispatch sports writer serving as president of the St. Louis Newspaper Guild. "I think there's a great sense of relief. This has been hanging over us for several months. At least the uncertainties are gone."
Other Pulitzer newspapers include The Pantagraph, Bloomington, Ill.; The Daily Herald, Provo, Utah; the Santa Maria Times, Santa Maria, Calif.; The Napa Valley Register, Napa, Calif.; The World, Coos Bay, Ore.; The Sentinel, Hanford, Calif.; the Arizona Daily Sun, Flagstaff, Ariz.; the Daily Chronicle, DeKalb, Ill.; The Garden Island, Lihue, Hawaii; the Daily Journal, Park Hills, Mo.; The Lompoc Record, Lompoc, Calif.; and The Daily News, Rhinelander, Wis.
Contributing: Dave Anderton