Chatham to acquire McClatchy

Hedge fund Chatham has made the winning bid for bankrupt publisher McClatchy.

Ismail Shakil reported the news for Reuters:

Hedge fund Chatham Asset Management’s bid succeeded in a court-supervised auction for bankrupt news publisher McClatchy Co MNIQQ.PK, the news company said on Sunday.

The Miami Herald publisher said Chatham’s proposed deal, which needs a court confirmation and other regulatory approvals, would help it exit Chapter 11 protection in the third quarter.

McClatchy had filed for Chapter 11 bankruptcy protection in February, burdened by heavy debt it took on when it bought newspaper chain Knight Ridder in 2006 and large pension obligations that eat into its profits.

Tali Arbel from the AP wrote:

McClatchy is one of the largest newspaper companies in the U.S. It owns 30 papers including the Miami Herald, the Charlotte Observer and the Sacramento Bee. It filed for bankruptcy protection because of a heavy debt load stemming from its $4.5 billion purchase of the Knight-Ridder newspaper chain in 2006, just as the newspaper industry went into steep decline.

Kelly Tyko from USA Today noted:

McClatchy filed for Chapter 11 bankruptcy protection in February after grappling with a pension crisis and the news industry’s financial challenges. The filing was before the COVID-19 pandemic hit, which has affected newspaper companies nationwide.

The McClatchy family has controlled the Sacramento, California-based company for more than 160 years. The release said the proposed agreement will be finalized and filed with the U.S. Bankruptcy Court in the coming days.