HEDGE FUND PLANS TO BUY NEWSPAPER PUBLISHER MCCLATCHY

After years of declines in revenue and print circulation, the Mcclatchy Co., one of the largest and most respected news publishers in the country, announced Sunday that it expected to by bought by Chatham Asset Management, a New Jersey hedge fund, at the conclusion of a bankruptcy auction.

The announcement, which signals an end to 163 years of family ownership, underlines the growing influence of the finance industry on U.S. newspapers. And it means that a news company known for winning top journalism prizes is likely to become the property of a firm that owns The National Enquirer and other supermarket tabloids.

Mcclatchy, publisher of The Miami Herald, The Kansas City Star, The Charlotte Observer and its flagship publication, The Sacramento Bee, filed for Chapter 11 bankruptcy protection in February. Chatham, an investor in the company since 2009, is its largest creditor. In recent months it put together the bid that has been declared the winner in a U.S. Bankruptcy Court auction supervised by Judge Michael Wiles, a Mcclatchy spokeswoman said Sunday.

Chatham, which manages about $4 billion in assets on behalf of its clients, is expected to become the majority owner in the third quarter of the year, Mcclatchy said, and the publicly traded newspaper will go private. It will not be split up, Mcclatchy said, its 30 news outlets remaining intact.

In a statement, a Chatham spokesman said the company was “pleased with the outcome of the auction,” adding, “Chatham is committed to preserving newsroom jobs and independent journalism that serve and inform local communities during this important time.”

Mcclatchy did not disclose terms. In April, the company said it had received a Chatham-led bid worth more than $300 million. That offer included the debt assumed by the hedge fund and its partners.

The court and regulators must approve the deal. A bankruptcy court hearing on the matter is scheduled for July 24.