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A New York hedge fund that is the largest shareholder in Tribune Publishing Co. has reached an agreement to acquire the rest of the newspaper company that owns some of the largest newspapers in the country, including the Chicago Tribune and the New York Daily News.
Alden Global Capital LLC, which already held a 32% stake in the company, reached an agreement with a special committee appointed by the board to buy the rest of the company for $ 17.25 a share, valuing the company at around $ 630 million. The deal still requires shareholder approval.
TRONC NO MORE: COMPANY REVERTING TO ‘TRIBUNE
If the deal is approved, the company will no longer have publicly traded shares.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| TPCO | TRONC INC | 15.97 | +0.02 | + 0.13% |
The Wall Street Journal reported on Thursday that Alden was in talks with the board and close to reaching an agreement.
Alden made its first offer last year to buy the shares for $ 14.25 each. The Tribune closed Tuesday at $ 15.97, with a market value of $ 583 million.
Tribune appointed a special committee of independent directors in early January to review the proposal. Any business will require the approval of two-thirds of shareholders not affiliated with the hedge fund. This group includes Patrick Soon-Shiong, the billionaire biotech investor who owns about 24% of the shares, and Mason Slaine, a former media executive with about 8%. Slaine said earlier that Alden’s initial offer was very low. Mr. Soon-Shiong did not return messages asking for comment.
In a statement announcing the deal, Philip Franklin, president of the Tribune and a member of the special committee, said that efforts to improve the company’s performance allowed for the negotiation of “a premium, spot price, which the committee concluded was superior to the available alternatives. . ”
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As part of the deal, Alden signed a non-binding commitment to sell the Baltimore Sun, the Capital Gazette and a handful of weeklies to a public charity called Sunlight for All Institute, formed by Maryland hotel baron Stewart Bainum Jr.
If completed, the deal will have far-reaching implications for an industry plagued by sharp declines in revenues over the past 20 years, which have led to a wave of consolidations and cost cuts. Between 2008 and 2019, the industry cut 51% of jobs in the newsroom, according to the Pew Research Center.
Alden controls the MediaNews Group, a private company that owns about 60 daily newspapers across the country, including the Denver Post, San Jose Mercury News and Orange County Register. The hedge fund has a reputation for making deep cuts in the costs of the securities it acquires.
Tribune, one of the nation’s largest newspaper chains in circulation, publishes nine large-market daily newspapers, including Baltimore Sun, Orlando Sentinel and Hartford Courant.
Alden first took a position in the Tribune in November 2019, when it acquired 25% of the company from then controlling shareholder Michael Ferro. The hedge fund subsequently increased its stake to 32%, but later reached a standstill agreement with the board in exchange for two seats on the board. He later extended the deal in exchange for an additional seat on the board, giving Alden three of the company’s seven board positions.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| GCI | GANNETT CO INC | 5.39 | +0.13 | + 2.47% |
The Tribune deal is not Alden’s first attempt to gain a bigger stake in the country’s newspaper industry. In 2019, MediaNews Group made a hostile offer to buy USA Today’s Gannett Co. publisher, but failed after an unsuccessful proxy fight. A few months later, Gannett struck a deal to sell itself to New Media Investment Group Inc., the parent of GateHouse Media.
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Moelis & Company LLC was a financial advisor to Alden and Akin Gump Strauss Hauer & Feld LLP was its legal advisor. Lazard was a financial advisor to the Tribune board of directors’ special committee, and Davis Polk & Wardwell LLP was its legal advisor.