The headlines of Fox Business Flash are here. See what clicks on FoxBusiness.com.
A New York mutual fund, which is the largest shareholder in Tribune Publishing Co. is, has entered into 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 New York Daily News.
Alden Global Capital LLC, which already owns 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 per share, which the company values at about $ 630 million. The agreement still requires shareholder approval.
TRONC NO MORE: COMPANY WHO CHOOSES BACK TO TRIBUNE
If the transaction is approved, the company will no longer be traded in public.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| TPCO | TRONC INC | 15.97 | +0.02 | + 0.13% |
The Wall Street Journal reported last Thursday that Alden was in negotiations with the board and was close to an agreement.
Alden only made its offer last year to buy the shares for $ 14.25 apiece. Tribune closed at $ 15.97 on Tuesday with a market value of $ 583 million.
Tribune appointed the special board committee of independent directors in early January to review the proposal. Any transaction requires two-thirds of the shareholders who are not with the hedge fund to unsubscribe. This group includes Patrick Soon-Shiong, the billionaire biotechnology investor who owns a stake of about 24%, and Mason Slaine, a former media manager with about 8%. Mr. Slaine had earlier said Alden’s initial offer was too low. Mr. Soon-Shiong did not return messages for comment.
In a statement announcing the deal, Philip Franklin, Tribune’s chairman and a member of the special committee, said that efforts to improve the company’s performance, including the negotiation of a premium, would make all cash prizes possible, which the committee finds to be better than the available alternatives. ”
WILL A MEGA MERGER KILL YOUR LOCAL NEWSPAPER?
As part of the deal, Alden signed a non-binding term paper 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 the deal is completed, it will have far-reaching consequences for an industry plagued by sharp declines in revenue over the past 20 years, which has led to a wave of consolidations and cost cuts. Between 2008 and 2019, the industry shrugged off 51% of its editorial jobs, according to the Pew Research Center.
Alden manages MediaNews Group, a privately held company that owns approximately 60 dailies across the country, including the Denver Post, San Jose Mercury News and Orange County Register. The hedge fund has the reputation of making deep cost reductions in the costs it acquires.
Tribune, one of the largest newspaper chains in the country in circulation, publishes nine dailies on the larger market, including the Baltimore Sun, Orlando Sentinel and Hartford Courant.
Alden only took a position in Tribune in November 2019 when he acquired 25% of the company from the then controlling shareholder Michael Ferro. The hedge fund then increased its stake to 32%, but then reached a standstill agreement with the board in exchange for two seats on the board. This later extended the deal in exchange for an additional board seat, which gave Alden three of the company’s seven management positions.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| GCI | GANNETT CO INC | 5.39 | +0.13 | + 2.47% |
The Tribune agreement is not Alden’s first attempt to take a larger stake in the country’s newspaper industry. In 2019, MediaNews Group made a hostile bid for USA Today publisher Gannett Co. for sale, but failed after an unsuccessful proxy. A few months later, Gannett entered into an agreement to sell himself to New Media Investment Group Inc., the parent of GateHouse Media.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
Moelis & Company LLC was a financial advisor to Alden and Akin Gump Strauss Hauer & Feld LLP was his legal advisor. Lazard was financial adviser to the special committee of the board of directors of Tribune, and Davis Polk & Wardwell LLP was the legal adviser.