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A New York hedge fund that is the largest shareholder in Tribune Publishing Co. has reached a deal to acquire the rest of the newspaper company which owns some of the biggest papers in the country, including the Chicago Tribune and New York Daily News.
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Alden Global Capital LLC, which already owned 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 a share, valuing the company at around $630 million. The deal still requires shareholder approval.
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If the deal is approved, the company would no longer be publicly traded.
The Wall Street Journal reported last Thursday that Alden was in negotiations with the board and close to reaching a deal.
Alden first made its offer late last year to buy the shares for $14.25 apiece. Tribune closed Tuesday at $15.97 with a market value of $583 million.
Tribune appointed the special board committee of independent directors in early January to review the proposal. Any deal will require signoff from two-thirds of shareholders unaffiliated with the hedge fund. This group includes Patrick Soon-Shiong, the billionaire biotech investor who owns a roughly 24% stake, and Mason Slaine, a former media executive with roughly 8%. Mr. Slaine previously said Alden’s initial offer was too low. Mr. Soon-Shiong didn’t return messages seeking comment.
In a statement announcing the deal, Philip Franklin, Tribune’s chairman and a member of the special committee, said efforts to improve the company’s performance had allowed for the negotiation of ”a premium, all-cash price, which the committee concluded was superior to the available alternatives.”
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As part of the agreement, Alden has signed a nonbinding term sheet 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 completed, the deal will have far-reaching implications for an industry beset by sharp declines in revenue over the past 20 years that have led to a wave of consolidations and cost cuts. Between 2008 and 2019, the industry shed 51% of its newsroom jobs, according to the Pew Research Center.
Alden controls MediaNews Group, a private company that owns some 60 daily newspapers around the country including the Denver Post, San Jose Mercury News and Orange County Register. The hedge fund has a reputation for making deep cost cuts at titles it acquires.
Tribune, one of the biggest newspaper chains in the country by circulation, publishes nine larger-market dailies including the Baltimore Sun, Orlando Sentinel and Hartford Courant.
Alden first took a position in Tribune in November 2019 when it acquired 25% of the company from then-controlling shareholder Michael Ferro. The hedge fund subsequently increased its stake to 32% but then reached a standstill agreement with the board in exchange for two seats on the board. It later extended the agreement in return for an additional board seat, giving Alden three of the company’s seven board positions.
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The Tribune deal isn’t Alden’s first attempt to take a larger stake of the country’s newspaper industry. In 2019, MediaNews Group made a hostile bid to buy USA Today publisher Gannett Co. but failed after an unsuccessful proxy fight. A few months later, Gannett reached a deal to sell itself to New Media Investment Group Inc., the parent of GateHouse Media.
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Moelis & Company LLC was a financial adviser to Alden and Akin Gump Strauss Hauer & Feld LLP was its legal adviser. Lazard was financial adviser to the special committee of the board of directors of Tribune, and Davis Polk & Wardwell LLP was its legal adviser.
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