Trustees of the Gannett Foundation, the largest shareholder in the Gannett Co. Inc., voted unanimously Wednesday to engage an investment banking firm to negotiate a possible sale of its 10 percent block of stock in the company.
The possible sale is being made in an attempt to boost the foundation's income, according to Allen H. Neuharth, foundation chairman, who served as Gannett company chairman or president for 19 years before retiring last year.
"We are confident the media in general and Gannett in particular are poised for unprecedented financial success in this decade," Neuharth and Charles L. Overby, president and CEO, said in a joint statment. "But IRS regulations, which require foundations to pay out an amount equal to five percent of their assets annually, force us to seek higher income than common stock dividends pay.
THE WASHINGTON, D.C. area-based foundation, which has ties to Lawrence and to Kansas University, held its annual meeting in Los Angeles in connection with the convention of the American Newspaper Publishers Assn.
Dolph C. Simons Jr., editor and publisher of the Journal-World, was among the 11 people who were re-elected as foundation trustees.
The J-W has printed USA Today under contract with Gannett since 1984. The foundation has been a supporter of KU's School of Journalism and Mass Communications for several years and has funded the professional in residence program.
IN A STATEMENT issued Wednesday, the foundation explained its goals in the possible sale.
"With increased income, we will expand the work of the USA's largest information-based foundation, especially broadening programs in education, literacy and First Amendment freedoms," the foundation said.
It also said it would prefer a transaction that puts the block of stock in the hands of the Gannett Co. or to a Gannett employee stock ownership plan.
However, it said that its advisers, Salomon Bros. Inc., First Boston Corp. and Smith Barney, Harris Upham & Co., would "explore all alternatives."
On the news of the foundation's possible stock sale, Gannett stock rose 1 percent.
At Wednesday's New York Stock Exchange closing price of $36 a share, the present market value of the foundation's 15,940,185 shares was about $585.6 million. In the summer of 1987, the market value of the shares was high as $900 million.