Image source: Tribune Publishing
A deal to sell one of the country’s largest newspaper chains, Tribune Publishing Company, has been approved by its shareholders.
On Friday, Tribune announced that investors signed off on a roughly $630 million bid from Alden Global Capital, a New York-based hedge fund that already owns nearly one-third of the publishing company.
Under the terms of the deal, Alden will acquire all outstanding Tribune’s common stock for $17.25 per share in cash. According to Tribune, 81.28% of the shares held by non-Alden stockholders supported the purchase, in excess of the two-thirds required.
The other top shareholder, billionaire Los Angeles Times owner Patrick Soon-Shiong, who held nearly 24% of Tribune’s shares, recused himself from voting because he viewed his stake as “a passive investment” and is focused on his other holdings, which include his paper and San Diego Union-Tribune.
After the deal’s expected close on Tuesday, Tribune will become a privately held company, and Alden will take control of the Chicago-based chain’s nine newspapers, including The Chicago Tribune, Baltimore Sun and New York Daily News. It will also make Alden the second-largest newspaper company in the US, after Gannett Co.
Alden already controls Digital First Media Group, a chain that owns dozens of publications including the Boston Herald, Denver Post and San Jose Mercury News, and has a reputation for making drastic cuts at newspapers it acquires.
In a statement Friday, Tribune’s board chairman, Philip G. Franklin, said, “Today’s results represent an important milestone in completing the transaction, and we appreciate the strong support we received from Tribune stockholders.”
Heath Freeman, Alden’s president, said that the purchase of Tribune “reaffirms our commitment to the newspaper industry” and their “focus on getting publications to a place where they can operate sustainably over the long term.”
Freeman also said, “Local newspaper brands and operations are the engines that power trusted local news in communities across the United States.”
Following Alden’s buyout bid, unions at Tribune-owned newspapers had pushed for alternative buyers. Employees have worried about a potential takeover since 2019, when Alden became Tribune’s largest shareholder, with a 31.6% stake and three seats on the company’s seven -member board.
Despite receiving a higher bid of $18.50 per share from Maryland hotel executive Stewart Bainum Jr. in March, Tribune’s board opted to stick with Alden’s offer.
It did, however, give Bainum the green light to pursue financing for his bid, but he was unable to find an equity partner after one of the interested investors, Swiss billionaire Hansjörg Wyss, abruptly pulled out of the deal.
In a statement to The Baltimore Sun, Bainum said, “While our effort to acquire the Tribune and its local newspapers has fallen short, the journey reaffirmed my belief that a better model for local news is both possible and necessary.”
Jon Schleuss, president of the NewsGuild union which represents Tribune staffers, told USA Today, “Voting in favor of selling to Alden represents a short-sighted view of the value of the company and an utter disregard for the value of quality news coverage.”
“Alden has a track record of cutting local newsrooms to the bone,” he said. “Alden’s playbook of massive cuts will mean fewer journalists able to cover their communities, hold the power to account and provide a voice to the voiceless.”
According to the NewsGuild union, Alden cut staff at union-represented papers by an average of 75% over a six-year-period.
Even prior to the coronavirus outbreak, the newspaper industry was struggling with declining revenues and transitioning to a digital landscape.
According to The Associated Press, publishers have shut down more than 2,000 newspapers over the past 15 years, and half of newsrooms jobs have disappeared.
Source: Equities News