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

Steinbrugge: Top 10 Hedge Fund Industry Trends for 2017

Jan 3 2017 | 9:03pm ET

Each year, Agecroft Partners' Don Steinbrugge predicts the top hedge fund industry...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

The U.S. Commodity Futures Trading Commission (CFTC) ordered The Goldman Sachs Group Inc., and Goldman, Sachs & Co. to pay a $120 million penalty for attempted manipulation and false reporting of ISDAFIX Benchmark Rates, a global benchmark for interest rate products.