In the repurchase, the company paid $6.2 million in cash and issued unsecured subordinated promissory notes with an aggregate principal amount of $25.6 million as the purchase price for the Class C shares. The cash payment equaled the amount of the minimum unpaid and undeclared dividend on the Class C shares.
"This transaction simplifies our capital structure and allows us to remove a class of stock that had enhanced voting and other rights," said Steven Smith, chairman and chief executive officer of the parent company of the Milwaukee Journal Sentinel.
The Class C shares were first issued at the time of the company's initial public offering in 2003 and had rights that included, among others, a minimum dividend, rights to approve strategic transactions or to receive a premium in the event of a strategic transaction, conversion rights, two votes per share and a right to designate a board nominee. The Class C rights were terminated with the transaction.
The transaction reduced the company's number of outstanding shares by 3.3 million shares and is expected to have a positive effect on the company's reported earnings per share (EPS).