According to an agreement that will reform the American newspaper industry, three people with knowledge of the matter became difficult just one month after an agreement was reached. As a result, New York hedge fund Alden Global Capital may have to fend off a new suitor for Tribune Publishing, the chain of major metropolitan dailies across the country, including The Chicago Tribune, The Daily News and The Baltimore Sun, the people said .
On February 16, Alden, the largest shareholder in Tribune Publishing, with a 32 percent stake, reached an agreement to buy the rest of the chain in a deal that the company valued at $ 630 million. In the deal, Alden would own all the Tribune Publishing articles and then distribute The Sun and two smaller Maryland newspapers at a cost of $ 65 million to a nonprofit organization run by Maryland hotel magnate Stewart W. Bainum Jr.
Bainum and Alden have been at odds over the past few days over the details of the operating agreements that would take effect as the Maryland newspapers passed from one owner to another, the people said. In response to this, Mr. Bainum has taken a preliminary step to make a bid on Tribune Publishing, the people said.
Mr. Bainum has asked the Tribune Publishing Special Committee, a group consisting of three independent board members, for permission to be released from a non-disclosure agreement prohibiting him from discussing the agreement, allowing him to partner for a new one. bid can pursue the people said.
A spokesman for Mr. Bainum said he did not comment. Tribune Publishing’s special committee declined to comment via a spokesman. A spokesman for Alden did not comment.
Alden has been investing in the newspaper industry for over a decade. It owns about 60 dailies, including The Denver Post and The San Jose Mercury News, by a subsidiary, MediaNews Group. The agreement to acquire the rest of Tribune Publishing will make it an even greater force in the news media industry, by some standards the second largest newspaper company after Gannett, the company that publishes one-fiftieth of all American newspapers, including USA Today.
Journalists criticized Alden for bringing his newspapers deep into the pocket, often through the retrenchment of journalists and the shrinking of local news coverage. Over the past year, journalists have led public campaigns at various Tribune articles urging local benefactors to buy newspapers they use so that they would not fall under the control of the hedge fund. Alden maintains that it is the rare enterprise that prevents local newspapers from doing business.
The Alden Tribune transaction requires the approval of the shareholders who own approximately two-thirds of the Tribune Publishing shares not owned by Alden. The largest holder of these shares, with a total stake of nearly 25 percent, is Patrick Soon-Shiong, the biotech billionaire who owns, along with his wife, Michele B. Chan, The Los Angeles Times. Dr. Soon-Shiong, which owns enough of Tribune Publishing to veto the deal itself, declined to comment on the agreement between Alden and Tribune. He did not immediately respond to a request for comment.
As mnr. Bainum succeeds in reaching an agreement to buy Tribune, he will likely seek local owners for other newspapers, which also include The Hartford Courant, The Orlando Sentinel and The South Florida Sun Sentinel.
Two of the people said Mr. Bainum, who lives in a suburb of Washington, Maryland, was willing to raise $ 100 million for a bid and then seek additional investment from others. Since 1997, Mr. Bainum is the chairman of Choice Hotels, a multi-million dollar public company that owns the brands Comfort Inn, Quality Inn and MainStay Suites, a business that grew out of his father’s business.
Alden has been seeking full ownership of Tribune Publishing since 2019, when it revealed it had bought its 32 percent stake. Last year, it could not reach an agreement to buy the rest of the company with a bid that the total company valued at $ 520 million.
Tribune announced last month that it will hold $ 99 million in cash by the end of 2020. In December, they also announced the sale of a $ 160 million majority-owned subsidiary.