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A hotel magnate from Maryland and a Swiss billionaire made a bid for Tribune Publishing Co. that the newspaper chain is expected to give preference to a takeover agreement it has already entered into with the hedge fund Alden Global Capital LLC.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| TPCO | TRONC INC | 18.03 | +0.04 | + 0.22% |
A special committee of Tribune’s board has determined that a bid of approximately $ 680 million and $ 18.50 per share submitted last week by Choice Hotels International Inc, chairman Stewart Bainum and Hansjörg Wyss, is likely to lead to a proposal better than Alden’s $ 635 million deal, people familiar with the matter said. This is a legal agreement indicating that Alden may need to increase its bid or lose the risk.
The decision comes after the two men indicated that they intend to personally carry more than $ 600 million, compared to a previous amount of $ 200 million.
ALTERNATIVE BIDERS BECOME NEWSPAPER CHAIN: REPORT
Now that the group has submitted a fully funded bid, it’s gaining access to private financial data to exercise due diligence and to negotiate other terms, a major step towards the completion of an agreement that Alden’s n can replace, they said. There is no guarantee that the group will succeed, and it is still possible that he may change his offer or walk away after examining the company’s finances.
If Alden lost the deal, it would mean an incredible 11-hour turnaround for the contemporary fund in New York, and a big win for critics who say the model of aggressive cost-cutting is hurting the local news industry. Alden devoted nearly a year and a half to taking over Tribune, publisher of nine major dailies, including the Chicago Tribune, New York Daily News and the Baltimore Sun.
A hotel magnate from Maryland and a Swiss billionaire made a bid for Tribune Publishing Co. that the newspaper chain is expected to give preference to a takeover agreement it has already entered into with the hedge fund Alden Global Capital LLC. (Photo by JIM WATSON / AFP via Ge
Alden entered into an agreement in February to pay $ 17.25 per share for the rest of the company. It was agreed to sell Bainum the Baltimore Sun separately for $ 65 million once the Tribune agreement was finalized. The agreement fell apart due to disagreements over the cost of the continued services the Sun would receive after the sale of Tribune.
Alden owns a newspaper company called MediaNews Group that has amassed a portfolio of approximately 70 dailies through a series of acquisitions, most notably Denver Post, San Jose Mercury News and St. John’s. Paul Pioneer Press. The hedge fund has been a lightning rod for criticism in the media industry over aggressive cost cutting on titles it acquires.
According to the News Guild, this has cut newsroom staff by more than 75% over the past ten years. In one newspaper, the Norristown Times Herald in Pennsylvania, the news office went from 45 in 2012 to just five today, the union said.
This approach contributed to the competitive offer being offered. Reporters at several Tribune articles began campaigns to find alternative bidders. Wyss, who founded a physician Bainum after reading such a plea from reporters at the Chicago Tribune.
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As usual, the Tribune Board has continued to recommend Alden’s transaction to shareholders and will do so until another proposal is officially considered superior. Assuming this happens in the coming weeks, Alden will have a four-day window on which the offer can match or walk away with a break-up fee.
The deal stipulates that it will owe $ 20 million if Tribune scraps their deal in favor of another. In that case, Alden could also make a profit on its 32% stake in the company.
On March 16, Bainum made a non-binding offer of $ 18.50 per share to buy Tribune, which was on condition that it could raise the financing. He agreed to set aside $ 100 million of his own money for the effort and Mr. Wyss later allocated another $ 100 million with the goal of eventually taking control of the Chicago Tribune.
People close to Bainum said he had long been saddened by the decline of the Sun, his homepage. He said that if his bid is successful, he intends to eventually give control of the paper to a non-profit trust.
Florida investor Mason Slaine, which owns a 3.4% stake in Tribune, has shown interest in but is not part of the bid to acquire publisher Orlando Sentinel and Sun Sentinel in Fort Lauderdale , the people said.
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Public companies that offer wars, usually a rare phenomenon, appear regularly this year, in part because of sky-high valuations that leave a limited number of attractive acquisition targets and low interest rates that make financing cheap and plentiful.
Last week, some private equity investors agreed to increase the price for transportation technology company Cubic Corp after an interoperator emerged. The laser manufacturer Coherent Inc. was the subject of a frantic three-way war that ended in a nearly $ 7 billion deal last month.