Swiss Billionaire Drops Out of Bid for Tribune Publishing

Swiss billionaire Hansjörg Wyss has dropped out of a bid to buy Tribune Publishing, but his partner in that effort remains committed to purchasing the Chicago-based newspaper chain, according to The Chicago Tribune citing a source close to the situation.

On Friday, Wyss notified Maryland hotel executive Stewart Bainum that he was pulling out of the deal after determining his long-term plan to turn the flagship Chicago Tribune into a national publication was going to be “extremely difficult” without a large investment, the source said Saturday.

Wyss

The pair had joined forces to make a fully financed $680 million bid earlier this month to buy the newspaper chain. The nonbinding proposal by an entity they formed called Newslight priced Tribune Publishing at $18.50 per share, topping a $17.25-per-share offer by hedge fund Alden Global Capital.

Newslight is currently engaged in due diligence — a detailed examination of Tribune’s financial records — a final step before making a firm offer. The source said the offer, which was expected in coming days, will be delayed while other financing is arranged.

Wyss’ exit deals a significant blow to Bainum’s effort. Tribune Publishing is expected to move forward with securing shareholder support for the Alden proposal.

In addition to the Chicago Tribune, Tribune Publishing owns The Baltimore Sun; the Hartford (Connecticut) Courant; the Orlando (Florida) Sentinel; the South Florida Sun Sentinel; New York Daily News; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.

Alden, a New York-based hedge fund and Tribune Publishing’s largest shareholder with a 31.6% stake, reached an agreement in February to buy the rest of the company at $17.25 per share and take it private. The deal, which values Tribune Publishing at about $633 million, requires approval from two-thirds of the other shareholders in a proxy vote to be scheduled, as well as regulatory approval.

If Tribune Publishing accepts a higher bid, Alden would have four business days to match the offer or receive a $20 million breakup fee.

Wyss, an octogenarian former CEO of medical device manufacturer Synthes who lives in Wyoming and runs a conservation foundation, teamed up with Bainum last month. On April 5, the Tribune Publishing board confirmed the Bainum-Wyss bid would reasonably be expected to lead to a “superior proposal” over Alden’s offer, pending due diligence. Wyss’ abrupt exit delays but doesn’t necessarily derail the $680 million bid, the source said.