Blog Post

McClatchy Going Private? CEO Pruitt Resigns Controlling Interest In Family Trusts

The McClatchy Co (NYSE: MNI). CEO Gary Pruitt has stepped down from four trusts owned by the McClatchy family — leading to speculation that McClatchy might be looking to go private, first picked up by Alan Mutter and then by E&P reported. An earlier story in the Sacramento Bee, which is owned by McClatchy, detailed that Pruitt removed himself as a co-trustee of four separate McClatchy family-owned trusts. The trusts hold 12.5 million Class B shares, or 80 percent of the voting stuck in The McClatchty Co. Elaine Lintecum, McClatchy’s treasurer, tells SacBee that Pruitt is stepping aside because of “governance issues.” The company feels that it would be better to “break up the roles” and that Pruitt shouldn’t be wearing “so many hats.” Lintecum also says that the move isn’t a precursor to McClatchy going private, something that has been rumored for some time. Pruitt’s responsibility for the trusts has been assumed by Leroy Barnes Jr., a non-family member who has been a McClatchy director for eight years.

Pruitt has said that going private is not in the cards right now because of McClatchy’s heavy debt load, related to its acquisition of Knight Ridder. And that does remain a significant hurdle, as exemplified by the crushing debt Sam Zell is having to deal since buying Tribune Company. But as E&P says, McClatchy stock has been heavily discounted by Wall Street in recent months. It’s now down about 90 percent from when it announced it was buying Knight Ridder.