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.
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 legal language, indicating that Alden will likely 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.
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.