Missouri Minute: Hedge fund buys Kansas City Star parent; COVID-19 test demand overwhelms labs

Good morning, MBA readers,

Although Centene CEO Michael Neidorff said he is dedicated to the St. Louis region and will not relocate the health insurer’s headquarters, Centene’s recent decision to hire thousands in North Carolina and Neidorff’s comments critical of St. Louis have stirred concern among local officials. Some say the CEO is frustrated with local leadership, and Neidorff has cited the city’s reputation for crime as detrimental to recruiting efforts. Despite Centene’s investment in the St. Louis area and stated plans to stay there, such a critique from the leader of the state’s only Fortune 50 company has nevertheless made waves. Across the state in Kansas City, the major daily newspaper has a new corporate owner. News publisher McClatchy, which owns The Kansas City Star, will be bought out by hedge fund Chatham Asset Management. Chatham won a court-supervised auction for the bankrupt publisher. Also in Kansas City, it is taking longer to get COVID-19 test results as demand for the tests has climbed. Increased access to testing has led to stress on laboratories and supply chains, and some results are taking up to 10 days to return, making coronavirus containment efforts more difficult.


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Demand for COVID-19 tests in Kansas City rises, overwhelming labs
Tests used to only be available to those who had been exposed to the virus and were showing symptoms, but with free testing options for anyone now, results in Kansas City can take up to 10 days — up from the previous three- to five-day wait. The backlog has caused difficulties in contact tracing. (Kansas City Star)

Hedge fund wins auction to purchase Kansas City Star parent McClatchy
McClatchy had filed for bankruptcy in February, and started looking for buyers in April. Chatham Asset Management, which held part of the publishing company’s debt, won the bid in a court-supervised auction. (Reuters)

Anheuser-Busch sued for driving down value of company ahead of acquisition
The St. Louis-based brewer announced it would buy Craft Brew Alliance in November, and already owned nearly one-third of the company. Anheuser-Busch’s distribution network accounted for more than 90% of CBA’s sales, and a shareholder of the smaller brewery claims Anheuser-Busch used that to suppress CBA’s revenue and buy its shares at a lower price. (St. Louis Business Journal)

Bidder looks to buy St. Alexius Hospital for $18.5 million
The bidder, identified by a St. Alexius trustee as “an experienced hospital operator,” was selected to set the floor price in the south St. Louis hospital’s July 28 bankruptcy auction. (St. Louis Business Journal)

MU cuts more jobs, but furloughs decrease
The University of Missouri laid off another 17 people over the last two weeks, but the number of furloughed employees decreased by 84 during that span. MU is still deciding whether to outsource roughly 250 custodial jobs to an outside vendor. (Columbia Missourian)

State Historical Society of Missouri lays off 14 employees
Eleven of the 14 employees were full-time workers in Columbia, and three others were part-time workers in St. Louis, Springfield and Kansas City. The organization also will reduce hours of operation at its facilities. (Columbia Missourian)

KC-area company lands $10 million Navy contract
Poole Fire Protection will provide a variety of fire protection services for the Naval Facilities Engineering Command Pacific, which includes locations in Guam, Japan and Australia. (Kansas City Business Journal)

Amazon to open its first retail store in St. Louis area
The store will be located at Saint Louis Galleria and is currently hiring, although it is not clear exactly when it will open. This is Amazon’s first brick-and-mortar store in Missouri. (St. Louis Business Journal)

Rising temperatures expected to stress utilities
A new report shows that in the next two decades, rising temperatures are expected to stress Missouri’s power system more than any other state’s. The stress could increase the frequency of rolling blackouts and make it harder for utilities to cool power plants. (St. Louis Post-Dispatch)

Estate of late bank owner donates $8.4 million to Shriners Hospital for Children
The donation to the St. Louis hospital came from Norman Harty, the president and owner of 10 branches of First Commercial Bank across southeastern Missouri, who died in 2017. (St. Louis Business Journal)


Say that again

“We went through 13 different banks trying to get a start-up loan and we were denied at all of them — for 13 different reasons.”

That is Alicia Yahaya, co-owner of Open Minds Child Development Center in Kansas City, recalling the experience of starting her company. Her business was able to find support from family to launch, but many minority-owned businesses struggle to secure financial support from banks. Similarly, minority-owned and women-owned businesses have faced disparities in accessing funding from the Paycheck Protection Program. Only 24 of the 4,700 businesses in the Kansas City area that have received PPP loans of more than $150,000 are Black-owned businesses, the Kansas City Star reports. Yahaya said a large part of her success in obtaining a loan was that her company had an existing relationship with a local bank. But many smaller, Black-owned businesses do not have relationships with traditional banks, Politico reports, which poses a problem in terms of access to coronavirus relief funds because the responsibility of distributing PPP loans has largely fallen on private lenders.

 


Go figure

2,000

That is the number of people health insurer Centene has hired virtually over the last two months for its planned $1 billion eastern headquarters in Charlotte, North Carolina, according to Centene CEO Michael Neidorff. With up to 6,000 new jobs to be added in Charlotte over the next decade, the new location could surpass the headcount of the company’s headquarters in Clayton, the St. Louis Post-Dispatch reports. Since announcing the new facility, Neidorff has criticized the St. Louis area, saying its reputation for crime makes it difficult for businesses to attract talent. Some say the comments are driven by frustration with local leadership. But Neidorff says Centene is still invested in the region, and believes improving the area is a process.


Hello, my name is

Joni Wickham

Previously the chief of staff for former Kansas City Mayor Sly James and now the co-founder of Wickham James Strategy Solutions, the veteran of state and local politics recently became a first-time author. Her book, titled “The Thin Line Between Cupcake and Bitch,” focuses on her time in the political and leadership arena, juggling the issue that some people find her too nice, and some find her too — well, the book title says it best. Wickham said most women walk that same fine line. “This is not hyperbole when I say this,” she told Startland News, “but almost every woman I know has dealt with that at some point.” The book reached No. 1 in the Women in Politics category of the Amazon bestsellers list before it was released earlier this month.


It’s been a pleasure doing business with you this morning.


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