The main headlines of Fox Business Flash are here. Check out what is clicking on FoxBusiness.com.
A Maryland hotel tycoon and a Swiss billionaire have made an offer for Tribune Publishing Co. that the newspaper chain is likely to favor rather than an acquisition deal already signed with the hedge fund Alden Global Capital LLC.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| TPCO | TRONC INC | 18.03 | +0.04 | + 0.22% |
A special committee of the Tribune board determined that an offer of around $ 680 million, $ 18.50 per share submitted late last week by Choice Hotels International Inc. chairman Stewart Bainum and Hansjörg Wyss, is likely to lead to a bid higher than Alden’s $ 635 million business, people familiar with the matter said. This is the legal language of the business, indicating that Alden may need to increase its offer or risk losing the business.
The decision was made after the two men indicated that they plan to personally contribute more than $ 600 million combined, up from a previous total of $ 200 million, people said.
ALTERNATIVE BIDDERS EMERGING FOR THE NEWSPAPER CHAIN COURT: REPORT
Now that the group has submitted a fully funded proposal, it will have access to private financial data to conduct an audit and negotiate other terms, a big step towards concluding an agreement that could replace Alden’s, they said. There is no guarantee that the group will succeed in doing so, and it is still possible that they will change their offer or give up after reviewing the company’s finances.
If Alden loses the deal, it will represent an impressive 11-hour turnaround for the New York hedge fund, and a major victory for critics who say his aggressive cost-cutting model has hurt the local news industry. Alden had spent nearly a year and a half positioning himself to take control of Tribune, the publisher of nine large-market daily newspapers, including the Chicago Tribune, the New York Daily News and the Baltimore Sun.
A Maryland hotel tycoon and a Swiss billionaire have made an offer for Tribune Publishing Co. that the newspaper chain is likely to favor rather than an acquisition deal already signed with the hedge fund Alden Global Capital LLC. (Photo by JIM WATSON / AFP via Ge
Alden struck a deal in February to pay $ 17.25 per share for the rest of the company. She had agreed to sell the Bainum, the Baltimore Sun, separately, for $ 65 million, once the Tribune deal was finalized. That side deal collapsed due to disagreements over the cost of ongoing services that Sun would have received from Tribune after the sale.
Alden owns a newspaper company called MediaNews Group that has amassed a portfolio of around 70 daily newspapers through a series of acquisitions, primarily the Denver Post, San Jose Mercury News and St. Paul Pioneer Press. The hedge fund has been a lightning rod for criticism in the media industry for aggressive cost cuts in the securities it acquires.
In the past decade, it has reduced the newsroom staff by more than 75% in many of its newspapers, according to the News Guild. In a newspaper, the Norristown Times Herald in Pennsylvania, the newsroom went from 45 in 2012 to just five today, the union said.
This approach helped lead to the rival bid, with reporters from several Tribune newspapers launching campaigns to find alternative bidders. Wyss, who founded a Bainum doctor after reading the appeal of reporters from the Chicago Tribune.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
As is typical, the Tribune board continued to recommend Alden’s agreement to shareholders and will do so until another proposal is officially considered superior. Assuming that happens in the coming weeks, Alden would have a four-day window to match the counter offer or leave with a termination fee.
The agreement stipulates that $ 20 million would be owed if the Tribune scrapped its business in favor of another. In that case, Alden could also profit from its 32% stake in the company.
On March 16, Bainum made a non-binding offer of $ 18.50 per share to buy Tribune, subject to his being able to raise the financing. He agreed to put $ 100 million of his own money into the effort and Wyss later committed an additional $ 100 million with the intention of taking control of the Chicago Tribune.
People close to Bainum said he was very saddened by the decline of Sol, his hometown newspaper. He said that if his offer is successful, he ultimately intends to hand over control of the paper to a nonprofit fund.
Florida investor Mason Slaine, who owns 3.4% of the shares in Tribune, expressed interest in joining the effort to acquire Orlando Sentinel and Sun Sentinel in Fort Lauderdale, but is not part of that, people said.
GET FOX BUSINESS ON THE MOVE BY CLICKING HERE
Public company bidding wars, usually a rare phenomenon, are popping up this year, in part because of the very high valuations that leave a limited number of attractive acquisition targets and low interest rates that make financing cheap and plentiful.
Last week, two private equity investors agreed to raise the price of transportation technology company Cubic Corp. after the appearance of an intruder. Laser maker Coherent Inc. was the target of a frantic three-way bidding war that ended in a deal worth almost $ 7 billion last month.