Update on October 8, 2009:

United States Bankruptcy Court for the District of Delaware has approved the sale of substantially all of the assets of STM to STMH, a group led by Chicago businessman James C. Tyree.

The total transaction is valued at approximately $25 million and is expected to close by the end of October 2009.

Announcement (September 8, 2009):

STM has entered into an asset purchase agreement with STMH to sell substantially all assets of STM.

Under the terms of the agreement, STMH will acquire all assets of STM for $5 million in cash, subject to a working capital adjustment, and will assume certain liabilities of STM estimated to total approximately $20 million.

Kirkland & Ellis LLP is acting as legal advisor and Huron Consulting Group, Inc. is acting as restructuring advisor to STM.

Deal Value (US$ Million) 26.5
Deal Type                Acquisition
Sub-Category             Asset Purchase
Deal Status              Completed: 2009-10-26

Deal Participants

Target (Company)   Sun-Times Media Group, Inc. - Assets
Acquirer (Company) Sun-Times Media Holdings, LLC
Vendor (Company)   Sun-Times Media Group, Inc.

Update on October 8, 2009:

United States Bankruptcy Court for the District of Delaware has approved the sale of substantially all of the assets of STM to STMH, a group led by Chicago businessman James C. Tyree.

The total transaction is valued at approximately $25 million and is expected to close by the end of October 2009.

Announcement (September 8, 2009):

STM has entered into an asset purchase agreement with STMH to sell substantially all assets of STM.

Under the terms of the agreement, STMH will acquire all assets of STM for $5 million in cash, subject to a working capital adjustment, and will assume certain liabilities of STM estimated to total approximately $20 million.

Kirkland & Ellis LLP is acting as legal advisor and N M Rothschild & Sons Limited is acting as financial advisor, while Huron Consulting Group, Inc. is acting as restructuring advisor to STM.

Deal Value (US$ Million) 26.5
Deal Type                Acquisition
Sub-Category             Asset Purchase
Deal Status              Completed: 2009-10-26

Deal Participants

Target (Company)   Sun-Times Media Group, Inc. - Assets
Acquirer (Company) Sun-Times Media Holdings, LLC
Vendor (Company)   Sun-Times Media Group, Inc.

Deal Rationale

The Chicago Sun-Times reported 5.5 percent increase in its overall/weekday home delivery circulation, a positive result as the Company has focused diligently on growing home-delivery circulation and continued its relentless commitment to customer service and retention. Single-copy circulation declined, as a single-copy price increase to 75 cents for Monday through Saturday was put into effect on March 30, 2009.

Combined Monday through Friday circulation for Sun-Times Media's daily papers, which includes the Chicago Sun-Times and seven suburban newspaper titles, was 460,389, down 12 percent from the same period a year ago, and for its weekly papers 116,784, down mainly due to the discontinuation of several titles and price increases implemented at all suburban newspaper titles. Excluding the Chicago Sun-Times, the average Monday through Friday circulation for the seven suburban dailies was 184,748, down 11 percent.

"As we publicly release our circulation figures today for all of our ABC audited publications, we have positive news to report. When we complete the sale transaction later today, the Chicago Sun-Times and our suburban news titles will be under new ownership, free and clear of old legacy issues and facing new opportunities and new investment. It is truly a bright new day for our publications, our readers and our advertisers," said Jeremy L. Halbreich, Interim Chief Executive Officer and Chairman of the Board for Sun-Times Media Group.

"During this most recent period, we successfully executed our strategy to increase the prices of all of Sun-Times Media's newspapers as many newspapers have done in the face of rising production costs, including competitors in our marketplace," said Rick Surkamer, President and Chief Operating Officer of Sun-Times Media Group. "We are pleased that our newspapers were able to perform in line with our expectations for the period and in line with the performance of many other newspapers during this long economic recession. The future holds great things for Sun-Times Media, which already has a remarkable unparalleled footprint in the Chicago region, reaching more than 3.7 million readers each week in print and online, an astounding 52 percent of the Chicago DMA."

"The Chicago Sun-Times continues its reign as the city's best-read paper. And with new ownership and a promising future, we are excited to share new ideas and opportunities with our advertisers and to continue to bring the hands-down best news coverage of the city in print and online to our readers," said John Barron, Publisher of the Chicago Sun-Times.

About Sun-Times Media Group

Sun-Times Media Group is dedicated to being the premier source of local news and information for the greater Chicago area. Its media properties serve more than 300 communities across the region and include the Chicago Sun-Times and Suntimes.com; seven suburban daily newspapers, including the Beacon-News (Aurora), Courier-News (Elgin), Herald-News (Joliet), Lake County News-Sun, Naperville Sun, Post-Tribune (Merrillville, Ind.) and the SouthtownStar; 39 weekly newspapers published by the Pioneer Press and 12 weekly Sun newspapers, as well as Web sites for those newspapers, Roger Ebert.com, centerstagechicago.com and YourSeason.com.

SOURCE: Sun-Times Media Group, Inc.

Sun-Times Media Group 
Tammy Chase, 312-321-3230 
tchase@suntimes.com

Tyree's group, STMG Holdings LLC, offered about 25 million U.S. dollars, 5 million dollars in cash and about 20 million dollars in liabilities, to purchase the publisher of the Chicago Sun-Times and its 50-plus sister papers.

The bid came with a request for steep pay cuts and other concessions from 16 unions, 14 of which have approved the contract changes.

The closing remains contingent upon approvals by the two other bargaining units, which are expected to be reached in the coming days, the company said.

"We're very pleased and very excited with this result," said Sun-Times Media Group interim CEO Jeremy Halbreich. "It could not have happened without the dedication and hard work of our employees."