McClatchy Newspapers Attract Potential Buyers

At least 20 potential suitors are looking at buying all or part of McClatchy — the bankrupt owner of the Miami Herald, the Kansas City Star and the Sacramento Bee — and a federal judge wants the company back in court Monday to explain how it plans to run the sale.

The NYPost reports the newspaper giant’s largest secured creditors, Chatham Asset Management and Brigade Capital Management, submitted a so-called stalking horse bid in mid-April said to be “well in excess” of $300 million.

In exchange for a 100 percent ownership stake in the company, the hedge funds are offering to swap $263 million in first-lien notes as well as $30 million in working capital and settlements with trade creditors and unsecured pensioners.

McClatchy, which filed for Chapter 11 in mid-February, said in court proceeding that it wants to make a sale relatively quickly since it worries the sale process could be damaged by the eroding media environment due to the coronavirus.

The proposed credit bid submitted by the hedge funds, McClatchy Chief Executive Craig Forman said, will allow one of the nation’s largest newspaper chains to remain one company while resolving its legacy debt and pension obligations.

Whoever buys McClatchy will take the publicly traded company private and end the involvement of the McClatchy family, which still controls the company. It could not be learned who might else might be among the potential other bidders.