While David Kruidenier, chairman of The Des Moines Register and Tribune Co., was meeting with First Boston Corp. here today to consider the sale of the company, documents filed in Delaware Chancery Court revealed new details of the feuding in the Cowles media family.
The documents disclosed that Kruidenier, at the request of another family member, has agreed to resign as chief executive officer of Cowles Media Co., publisher of the Minneapolis Star and Tribune.
Members of the Cowles family own most of the stock of both the Minneapolis and the Des Moines companies, which own the two prominent newspapers as well as other broadcasting and publishing operations. Interfamily squabbles and complaints from shareholders about poor profits have led to pressure to sell one or both of the family companies.
The Des Moines Register and Tribune Co. has said it will make a decision on bids for all or part of its operations by Thursday. Potential buyers who have visited Des Moines recently include The Washington Post Co., The New York Times Co., Gannett Co. Inc., The Tribune Co. of Chicago, Morris Communications Corp., Cox Enterprises Inc. and Hearst Newspapers.
Lee Enterprises Inc., a Davenport, Iowa-based communications company, reportedly has entered the bidding with a $105 million offer for the Des Moines Register newspaper.
Documents filed in a lawsuit by dissident shareholders show that in November, Gannett Chairman Allen Neuharth approached Kruidenier about buying either or both of the Cowles family companies.
In a letter to Kruidenier, dated Nov. 20, 1984, Neuharth recalled that his first newspaper job was as a carrier for the Minneapolis paper. The letter included an offer of future employment for Kruidenier and favorable financial terms if he wants to repurchase some parts of the Cowles empire from Gannett, publisher of USA Today.
"In the event of our merger, FCC, cross-ownership or antitrust regulations would require Gannett to spin off Minneapolis TV station WTCN-11; the St. Cloud Daily Times; your Honolulu TV station, and perhaps one or two other smaller operations," Neuharth wrote.
"We could, of course, place those in the successor hands of our choice, on favorable financial terms. Therefore, if you or any key associates or major shareholders in your two companies wished the alternative of remaining at the head of a privately held media operation -- Gannett could make that readily and attractively possible. . . . "
"Additionally, we could work out a key role at the policy-making and/or operational level for you if you wish . . . ," Neuharth said in the letter.
Neuharth's letter said that, based on public information, Gannett considered the Des Moines Register Co. to be worth between $134.4 million and $140 million and the Cowles Media Minneapolis holdings to be worth $360 million to $375 million.
The bidding for the Des Moines papers began Nov. 5, with a $112 million offer submitted by Dow Jones & Co., publisher of The Wall Street Journal, in association with two former Dow Jones employes who were then executives of The Register.
In addition to The Des Moines Register newspaper, which has a daily circulation of about 240,000, the firm owns several newspapers, the NBC television affiliate in Honolulu, the ABC television affiliate in Moline, Ill., four radio stations and 14.3 percent of Cowles Media Co.
Gannett's offer is among hundreds of pages of documents that have been filed in Delaware as part of pretrial discovery in a lawsuit filed by Kingsley Murphy, a dissident shareholder of Cowles Media, who owns about 17 percent of the company's stock.
The depositions indicate that Kruidenier agreed to resign as chief exective officer of Cowles Media Co. this summer at the request of John Cowles Jr., a former chief executive officer of Cowles Media and a major stockholder. As part of their agreement earlier this month, a Cowles family voting trust was amended "to ensure continuity of ownership," which Kruidenier believed was important so the company could move ahead with long-range plans without the fear of an unwanted takeover.
Those trust amendments included increasing the voting stock in the trust from 44 percent to more than 50 percent of Cowles Media, and replacing several trustees so that John Cowles Jr. and his siblings control the trust.
While it was previously reported here and in other newspapers that the life of the trust was extended by 10 years to the year 2000, the depositions obtained today reveal that no legally binding changes were made in the life of the trust. It was widely believed that the life of the trust was extended since Kruidenier and John Cowles Jr. said on Jan. 10 in a joint statement that, "To ensure continuity of ownership, we have agreed to take the steps necessary to extend the Voting Trust for an additional 10 years, through the year 2000. . . . "
However, the depositions reveal that only verbal commitments to the concept of increasing the life of the trust were made. Sources said that under Delaware law, the life of this trust, due to expire in 1990, cannot be extended before 1988.
Murphy charges that the directors of Cowles Media breached their fiduciary responsiblities and engaged in "the sale of a corporate office for personal profit" by hiring a Cowles family member, John (Jay) Cowles III, for a top management position in exchange for some stock voting rights.