Tribune Suitor Discussing Plan to Put Up More of His Own Money
(Bloomberg) -- Real estate mogul Stewart Bainum Jr. is offering to put more of his own money into a takeover attempt for Tribune Publishing Co. as he tries to recruit like-minded partners for the deal, according to a person familiar with his thinking.
The billionaire is discussing a plan to double his stake in a potential bid to $200 million and tap an additional $100 million in debt financing, according to the person, who asked not to be identified because the deliberations are private. Bainum has notified a Tribune special committee about his new plan, the person said.
Bainum, chairman of Choice Hotels International Inc., has been trying to put together a fresh proposal after Swiss billionaire Hansjoerg Wyss dropped out of an investment group that they called Newslight. They had offered $681 million for the newspaper publisher, with about $500 million coming from Wyss.
With Wyss out, Bainum is seeking help from deep-pocketed individuals interested in preserving local journalism. He has approached leaders of major foundations in Chicago about joining him in the bid, but has yet to find a willing partner, according to the person. Tribune’s newspapers include the Chicago Tribune, Baltimore Sun and New York Daily News.
Before it fell apart, the previous Newslight bid topped a $635 million offer from hedge fund Alden Global Capital, which already owns 32% of Tribune and wants to purchase the rest. The firm has a reputation for deep cuts at the companies it acquires.
Wyss, who had said he didn’t want to see another truth-telling newspaper go “down the drain,” was seen as a savior by Tribune journalists. The effort to recruit new owners was kicked off by two Chicago Tribune reporters who interviewed more than 100 people in the business and philanthropic world. They also published an essay in the New York Times predicting that an Alden takeover would create “a ghost version of the Chicago Tribune.”
When Wyss joined the Newslight bid, he had envisioned turning the Chicago Tribune into a national newspaper, a person familiar with his thinking said earlier this month. But the due-diligence process indicated that such an idea would be difficult to execute, the person said.
In February, Tribune had agreed to be acquired by Alden. Bainum was initially part of that purchase, with a side deal that 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. That led Bainum to pursue an acquisition of the whole company.
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