NEW YORK, Jan 7 (Reuters) - The publisher of the Chicago Sun-Times newspaper urged shareholders to reject an effort by a dissident investor to replace its board, but said on Wednesday it would accept whatever decision they make.
Sun-Times Media Group SUTM.PK called Davidson Kempner Capital Management’s plan to replace the board “ill-conceived,” adding it has its own cost-cutting plan.
The publisher said it plans to reduce costs by more than $50 million, in addition to $50 million that it cut in 2008. It also plans to break even on a cash-flow basis in the next 12 to 24 months, it said in a statement.
The Sun-Times statement came two days after Davidson Kempner objected to the board’s decision to keep several directors who had planned to leave.
Davidson Kempner, which owns 5.89 percent of the Sun-Times’s shares, according to Reuters data, said it is a decision by the board to “further entrench itself, despite repeated previous commitments.”
Davidson Kempner wants to add company turnaround experts to the Sun-Times board. The publisher, like other U.S. newspaper owners, has experienced a drop in advertising revenue and is restructuring.
Sun-Times said that Davidson Kempner’s “accusation of entrenchment is a willful and irresponsible distortion of the truth.” It said the three directors in question said they would stay on past Dec. 31, 2008, the day they had planned to leave, so that the board could be “properly restructured.”
The Sun-Times Media Group is a remnant of Hollinger International Inc, the former media empire of disgraced and imprisoned Canadian media baron Conrad Black. (Reporting by Robert MacMillan; editing by Richard Chang)