Tribune Ends Talks With Rival Bidder, But Fight May Continue
(Bloomberg) -- Tribune Publishing Co. ended talks with a group contesting hedge fund Alden Global Capital’s takeover of the newspaper giant after the interlopers lost their biggest funding source, but the takeover fight may not be over yet.
Choice Hotels International Inc. Chairman Stewart Bainum Jr. is pressing ahead with efforts to buy the publisher and is pursuing other partners, a person with knowledge of the matter said Monday.
Swiss billionaire Hansjoerg Wyss dropped out of the $18.50-a-share bid for Tribune led by Bainum Jr., Bloomberg News reported on April 17. After conducting due diligence for the past two weeks, Wyss decided not to go forward with the proposal, people familiar with the situation said at the time. A representative for Wyss declined to comment. In a filing Monday, Tribune said it received a letter from Bainum informing the company of Wyss’s departure and concluded the Bainum group could no longer top Alden’s $17.25-a-share proposal.
The Bainum-Wyss group, which called itself Newslight, was seen as friendlier to the publishing company’s news staff than Alden, since the investors have vowed to protect local journalism. Alden, which already owns 32% of Tribune Publishing, has a reputation for deep cuts at the companies it acquires. Tribune’s newspapers include the Chicago Tribune and New York Daily News.
Tribune shares were down 5.3% to $17.40 in New York trading at 12:52 p.m.
Prior to the Newslight offer, Tribune Publishing agreed in February to be acquired by Alden. Bainum was initially part of that transaction, with a side deal that would have allowed him to acquire the Baltimore Sun and smaller newspapers in Maryland.
But Bainum and Alden disagreed over how they would share services in the time before the Maryland newspapers were fully independent of Tribune, and Bainum grew skeptical of Alden’s intentions in the deal, people familiar with the situation said in March.
Bainum then decided to pursue an acquisition of the whole company, with the help of like-minded backers. On April 5, Tribune Publishing said it would hold talks with Newslight about its $680.8 million bid, which it said was probably superior to Alden’s $634.8 million offer.
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