Despite Agreement, Hedge Firm Could Buy Tribune Co.

When Tribune Publishing and its largest shareholder, Alden Global Capital, struck a deal Wednesday to extend an ownership standstill agreement, it appeared to buy a year before the hedge fund could potentially take control of the newspaper company.

But, according to The Chicago Tribune, a filing Thursday with the Securities and Exchange Commission lays out a number of circumstances — from other major shareholders teaming up to someone making an offer to buy Tribune Publishing — that would terminate the agreement and allow Alden to buy more shares.

In fact, Alden itself could make an offer to buy a majority stake in the company, despite the standstill agreement.

Alden, a New York-based hedge fund with a reputation for sweeping layoffs at its newspaper properties, took a 32% stake in Tribune Publishing in November, but was restricted from buying additional shares through June 30. In return, Alden added two representatives to Tribune Publishing’s board.

Wednesday’s standstill agreement added Alden co-founder Randall Smith to the Tribune Publishing board, giving the hedge fund three seats on the now seven-member board. It also restricts Alden’s stake from passing 33% until after Tribune Publishing’s next annual shareholder meeting, which can take place no later than June 15, 2021.

The agreement includes several provisions that terminate the standstill restrictions. One is any person or group, other than Alden, acquiring 30% of outstanding shares.

Los Angeles Times owner Patrick Soon-Shiong, Tribune Publishing’s second-largest shareholder with a 24% stake of the company, also was bound by a standstill agreement through June 30. He is now free to buy or sell shares.

Launched in 2007, Alden owns about 200 publications through an operating company known as MediaNews Group, formerly Digital First Media. Its larger newspapers include the Denver Post, San Jose Mercury News and the St. Paul Pioneer Press.

In addition to the Chicago Tribune, Tribune Publishing also owns the Baltimore Sun; Hartford Courant; Orlando Sentinel; 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.