The Des Moines Register and Tribune Co. said today it has agreed to sell its newspaper operations to Gannett Co. for approximately $200 million in cash.
The announcement ended months of speculation about the future ownership of the prestigious Des Moines Register, which has a daily circulation throughout Iowa of about 240,000. Gannett also agreed to buy The Jackson (Tenn.) Sun, with a daily circulation of about 35,000, and two smaller Iowa weekly papers.
The Register also announced it has agreed to sell its ABC television affiliate in Moline, Ill., to The New York Times Co. Sources quoted in early editions of Friday's Register said that the price was $26 million.
Register Chairman David Kruidenier summed up industry reaction to Gannett's $200 million bid, which was significantly higher than four competing offers, when he said, "Their bid was very aggressive. I was pleasantly surprised."
One investment banker familiar with the bidding process said the $200 million offer from Gannett surprised everybody.
"They paid a breathtaking price," he said. "They must be expecting a massive improvement in operations. They have got a lot of work to do if this is going to pay off for them."
Three months ago, the thinly traded Register stock was selling for $35 a share; experts believe stockholders may receive as much as $250 a share when all of the company's assets are sold.
The Register has been owned by members of the Cowles family since it was purchased by Gardner Cowles Sr. in 1903. Cowles family members also own most of the stock of Cowles Media Co., publisher of The Minneapolis Star and Tribune. Interfamily squabbles and complaints from shareholders about poor profits have led to pressure to sell one or both of the family companies.
For Gannett, which is moving its headquarters to Rosslyn, the newspaper purchase brings the number of dailies in its chain to 87. The company, publisher of USA Today, is the nation's largest newspaper organization, with combined daily circulation expected to exceed 5 million when this acquisition, its largest, is completed in June.
The Register quoted informed sources who said the other four bidders for the newspaper properties were The Washington Post Co., The Tribune Co. of Chicago, Hearst Newspapers and Lee Enterprises Inc. of Davenport, Iowa.
"Gannett executives have told us The Register will be a prestige newspaper of the Gannett group," Kruidenier said.
But reaction in the newsroom of The Register did not reflect Kruidenier's outward enthusiasm about Gannett. Several reporters said they would have preferred to have been acquired by one of the other bidders.
"Gannett seems so vast and anonymous," one reporter said. "People would have preferred one of the other buyers, but obviously they didn't bid enough."
"People here were impressed with Gannett Chairman Allen H. Neuharth. In his talk in the newsroom, he called himself 'a little boy from South Dakota.' People liked the Midwestern connection."
Neuharth indicated that The Register's Washington bureau would be integrated with Gannett's Washington operation, adding that he did not forsee any layoffs in The Register's Iowa news staff.
The Register is one of the nation's only dailies with statewide circulation, some of which is considered to be unprofitable. In response to a question whether the paper would continue staterk closely with First Boston to determine what The Register should do with the 14.3 percent block of Cowles Media Co. stock it owns.