Employee-Owned Journal Communications Rejects Takeover Bid

Journal Communications is one of the largest employee-owned firms, and the largest in the communications industry. Majority employee-owned for over 50 years, it employs about 6,000 people. It publishes the Milwaukee Journal-Sentinel and has several subsidiaries in various media fields. About 2,700 employees own and vote stock that they become eligible to purchase after meeting seniority requirements. The employees own 90% of the company.

A New York firm, Sextant Partners, has offered to buy the company for twice its current market value, but the company's chairman rejected the offer. Sextant now hopes to go directly to the shareholders, but employees have told reporters there is little interest. Most believe their jobs and their retirement interests are better served by staying employee owned, a belief fueled in part by the consistently good performance of the company's stock. To acquire the company, Sextant would need a two-thirds vote from the owners, but even then those not voting to sell would have the right to buy stock from those who do want to sell at the previously appraised value, not the Sextant offer price.