It's official: Journal goes public
8:14 PM 9/03/03
Jenny Price Associated Press

MILWAUKEE - Journal Communications, the nation's oldest employee-owned company, won approval from shareholders to sell the company's stock publicly for the first time, according to documents filed Wednesday with the U.S. Securities and Exchange Commission.

Going public could dramatically alter the face of the company, which owns the Milwaukee Journal Sentinel and 42 radio and television stations, because employees likely will no longer be its majority owners.

Employees currently own 90 percent of the company's shares through a trust established in 1937 by Harry J. Grant, then chairman of the firm. Grant's heirs own the balance.

Journal Communications plans to use the net proceeds from the initial public offering to repurchase stock held by employees and retirees who want to sell shares, SEC filings said.

In order for the initial public offering to go forward, more than two-thirds of the shares had to be committed in support of the plan to dissolve the trust. More than 87 percent of the shares held by active employees were in favor, according to papers the company filed with the SEC.

"They must sense that Journal Communications is being so constrained by the marketplace forces that the best future is for them to get competitive with other major media corporations," said William Thorn, a journalism professor at Milwaukee's Marquette University.

The offering is expected to generate $221.9 million, according to SEC filings.

Journal Communications wants to invest in other publishing operations, acquire more broadcasting stations and continue to invest in its telecommunications business, according to SEC filings.

Thorn said the public offering will allow the company to use the same economic strategies and resources other media companies do to acquire additional properties.

Robert Dye, a Journal Communications spokesman, declined to comment Wednesday on the vote. SEC rules require companies to refrain from making public comment when a stock offering is pending.

The company filed its proposal for an initial public offering in May.

Journal Communications, founded in 1882, has offered its stock only to employees and retirees for more than 60 years through the trust. The stock will trade on the New York Stock Exchange under the symbol JRN.

An announcement the company distributed to shareholders Wednesday said an employee "who best exemplifies our entrepreneurial employee-ownership spirit" will travel to New York for the first day the stock is publicly traded. That date has not been announced.

Underwriters for Journal Communications estimate shares of the company's stock could sell for between $13.50 to $15.50 each, according to SEC filings.

The share price is expected in late September. Company officials will now embark on a two-week marketing period, known as an investor "roadshow," during which they will discuss the stock's merits with potential investors.

Journal Communications employs more than 6,000 people at the newspaper, six television stations and 36 radio stations in 11 states and other communications operations. The Journal Sentinel was formed in 1995 with the merger of The Milwaukee Journal and Milwaukee Sentinel.

The Journal Sentinel is Wisconsin's largest newspaper, with a circulation of 434,000 on Sunday and 247,000 daily, according to the company.