Alden Global Capital, an American hedge fund known for taking control of struggling American newspapers, revealed an offer to acquire and make the owner of the Chicago Tribune private, valuing the publisher at about $ 520 million.
The hedge fund, which already owns about 32 percent of Tribune Publishing, offered to buy the newspaper’s group for $ 14.25 a share, an 11 percent premium over the publisher’s closing price on Wednesday. market.
Alden has helped lead the consolidation of the local and regional newspaper industry in recent years, making deep cuts in the cost of its titles to increase profitability and create controversy along the way.
Employees in his publications described the company as “vulture capitalists”. Political leaders such as New York Sen. Chuck Schumer have argued that the management of the local newspapers’ hedge fund is having a negative impact on American democracy.
If the acquisition is approved, the fate of local US news businesses would fall further into the hands of financial groups, after rounds of consolidation over the past decade. The newspaper business has been shrinking for years, as online media has grown and foamy print advertising revenues have dried up, leaving local newspapers as targets for hedge funds and private equity.
Through MNG Enterprises, which is a private company controlled by Alden, the hedge fund has accumulated a portfolio of more than 200 newspapers, including The Denver Post and The Orange County Register, in Southern California.
“We believe that as a private company, Tribune would be able to unlock significant strategic and financial value,” said Randall Smith, Alden’s founder and former Bear Stearns banker, in a regulatory document issued on Thursday.
In the process, Alden said the deal was subject to approval by a committee of independent directors and two-thirds of Tribune shareholders who are not associated with Alden. In addition to Alden, the company’s second largest shareholder is Patrick Soon-Shiong, the pharmaceutical billionaire who bought the Los Angeles Times and owns about 24% of the shares in Tribune.
In 2019, Alden made a hostile takeover bid to acquire Gannett, owner of USA Today, for about $ 1.4 billion. After declining Alden’s offers for months, Gannett agreed to be sold to GateHouse Media, another rival newspaper owner.
Since failing to acquire Gannett, the hedge fund has been trying to take control of the Tribune, which also controls the New York Daily News and The Baltimore Sun. In July, the Tribune agreed to give Alden three of the seven board seats. as part of a truce to prevent the hedge fund from increasing its stake or launching a hostile takeover until after June 2021.
Alden, which is being informed of the transaction by investment bank Moelis & Co and law firm Akin Gump Strauss Hauer & Feld, said on Thursday that it hopes to reach a final settlement with Tribune within two to three weeks. .
The Tribune could not be reached for comment.