Pulitzer Chooses Lee Enterprises to Continue Its Newspaper Legacy

Business Wire, Jan 31, 2005

DAVENPORT, Iowa & ST. LOUIS -- Lee Agrees to Pay $64 Per Share in $1.46 Billion Acquisition of 14 Daily Newspapers, Including the St. Louis Post-Dispatch

Lee Enterprises, Incorporated (NYSE:LEE), and Pulitzer Inc. (NYSE:PTZ) announced today that they have entered into a definitive agreement for Lee to acquire Pulitzer for a cash purchase price of $64 per share, with enterprise value totaling $1.46 billion.

Pulitzer operates 14 daily newspapers, including the St. Louis Post-Dispatch, founded by legendary publisher Joseph Pulitzer in 1878. Others are the Arizona Daily Star in Tucson, Ariz.; 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.

Pulitzer also operates more than 100 weekly newspapers, shoppers, and niche publications, including the Suburban Journals of Greater St. Louis, a group of 38 weekly newspapers and niche publications with distribution of more than a million copies a week. Pulitzer also owns leading online sites in all of its markets, including STLtoday.com in St. Louis and azstarnet.com in Tucson.

Mary Junck, chairman and chief executive officer of Lee, described the acquisition as a continuation of Lee's long-term strategies:

"It's another terrific acquisition for Lee -- and, in both order of magnitude and revenue growth opportunities, remarkably similar to our highly successful purchase of the 16 Howard newspapers three years ago. The acquisition of Pulitzer allows us to take an exciting and logical next step into another exceptionally attractive group of markets, exactly the kind where we excel as an industry leader in building revenue and circulation."

She added: "Just like in Lee, Pulitzer's newspapers are, far and away, the primary source for news, information and advertising in their markets. Impressively, that's also true in St. Louis, where Pulitzer has expanded on the powerful reach of the Post-Dispatch with its network of Suburban Journals and STLtoday.com. Because of Pulitzer's strength and extended media platform, and also because of Midwestern lifestyle and economic similarities, we view St. Louis as very much like other Lee markets where we have been so successful."

In the combined company, Pulitzer will represent about 39 percent of the revenue and 34 percent of the daily circulation.

The acquisition is comparable to the 2002 purchase of Howard Publications, Inc. At that time, Lee grew by 50 percent in revenue and 75 percent in circulation. The Pulitzer acquisition will increase Lee's size by 60 percent in revenue and 50 percent in circulation.

Lee will become the fourth largest U.S. newspaper publisher in terms of dailies owned and seventh largest in circulation, growing from 44 to 58 daily newspapers in 23 states, with new total circulation of 1.7 million daily and 2.0 million Sunday. Combining calendar 2004 results, Lee's revenue will rise by more than $440 million, to $1.14 billion.

Michael E. Pulitzer, grandson of the founder and chairman of the Pulitzer board of directors, said: "After a lengthy review process in which we explored a broad range of strategic alternatives, the Pulitzer board has determined unanimously that a combination with Lee is the best way to enhance value for all Pulitzer's shareholders. As part of Lee, our newspapers will benefit from greater scale and resources, which are necessary to compete effectively in today's increasingly competitive media market. Lee and Pulitzer share similar cultures and values, beginning with our long history in, and passion for, the newspaper business. We both care deeply about our employees, communities and the public trust, and we manage our newspapers in the same devoted ways. In short, we couldn't have found a better steward to continue Pulitzer's 125-year legacy of journalistic excellence."

Robert C. Woodworth, chief executive officer of Pulitzer, said: "Lee is among the best newspaper operators in the industry, with an especially impressive record for revenue growth. When people ask me what to expect under the new ownership, the answer is obvious: Nothing breeds success like success, and Mary Junck has put together an impressive team at Lee that delivers results."

Junck said Lee will apply its five top operating priorities at the new newspapers, focusing on revenue growth, readership and circulation, strong local news, online strength and careful cost controls.

"Our management team is strong, experienced and enthusiastic about this opportunity, and our success with Howard has prepared us exceedingly well -- and from what we've seen already, the Pulitzer management is equally enthusiastic and receptive," she said.

"In St. Louis, we've been impressed with the excellent strategies already in place and look forward to contributing additional revenue programs to help speed progress on an exciting range of opportunities. The same is true in Tucson and at the other Pulitzer newspapers, where we'll also help the management teams introduce our many successful retail, classified and online advertising sales approaches, as well as our circulation sales and retention programs," Junck said.