Tribune Agrees to $430 Million Takeover by Hedge Fund
(Bloomberg) -- Tribune Publishing Co., the owner of the Chicago Tribune and New York Daily News, agreed to be acquired by Alden Global Capital LLC for about $430 million, putting a hedge fund known for firing journalists atop one of the nation’s largest newspaper companies.
Alden, which already holds a 32% stake in Tribune, agreed to pay $17.25 a share for the stock it doesn’t already own, according to a statement Tuesday. The investment group inquired about an acquisition at $14.25 a share in a letter sent to Tribune’s board in December.
Shares of Tribune weren’t available for trading after hours in New York. The price was 8% above Tuesday’s close of $15.97.
The loss of readers and advertisers to online media has delivered many newspaper into the hands of new owners -- from hedge funds like Alden to benefactors like billionaire Jeff Bezos, who owns the Washington Post.
The Alden transaction includes a side deal: The fund has agreed to sell the Baltimore Sun to the Sunlight for All Institute, a public charity formed by real estate investor Stewart Bainum Jr.
Staffers at Tribune have worried that Alden’s involvement with the company might mean more newsroom cuts, especially with the pandemic triggering a decline in ad spending. The New York Daily News permanently closed its Manhattan office in August.
In January 2020, two Chicago Tribune reporters wrote an op-ed in the New York Times calling for “a civic-minded local owner or group of owners” and saying Alden’s cost-cutting could lead to “a ghost version of the Chicago Tribune.” Tribune’s other big-city properties include papers in Baltimore and Orlando, Florida.
Though Alden last year extended a standstill agreement for its Tribune stake until June 2021, the pact allowed the hedge fund to buy more shares under certain conditions -- including rival acquisition approaches. Alden had noted in its December letter that Bainum, chairman of Choice Hotels International Inc., expressed interest in buying some Tribune assets.
The deal is slated to be completed in the second quarter, and Tribune’s stock will no longer be listed on any public market. Lazard served as the financial adviser to the special committee of Tribune’s board, while Davis Polk & Wardwell LLP was its legal adviser.
Moelis & Co. was the financial adviser to Alden, with Akin Gump Strauss Hauer & Feld LLP providing legal counsel.
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