Hedge Fund Takes Aim At Chicago Sun-Times

Nov 24 2008 | 1:43am ET

Davidson Kempner Capital Management has launched a proxy battle to oust the board of directors and CEO of the Sun-Times Media Group, which publishes the Chicago Sun-Times and dozens of other newspapers in Illinois and Indiana.

The hedge rejected a series of proposals made by the company as inadequate, nominating four candidates for a board that would be cut to five seats. Davidson Kempner owns a 5.9% stake in SMTG.

"The harsh reality is that weakening consumer demand, rising input costs of ink and newsprint, a slowdown in advertising, and a long term secular trend away from print towards online readership have already resulted in negative normalized free cash flow for Sun-Times of roughly $20 million per quarter on average since 2006," Davidson Kempner wrote in a letter to SMTG shareholders. "In our view, the company must take dramatic steps to arrest the cash burn rate before it exhausts the remaining liquidity on the balance sheet.”

Last week, SMTG Chairman Raymond Seitz and two other directors resigned. But Davidson Kempner wants the scalps of the remaining directors, excepting Robert Poile of fellow hedge fund Polar Securities, as well as that of CEO Cyrus Freidheim.


In Depth

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note