Tribune Media To 'Review' Hedge Fund Offer

Hedge fund Alden Global Capital is looking to buy Tribune Publishing and take the Chicago-based newspaper company private in a deal valued at $520 million.

Alden, which already owns 32% of Tribune Publishing, made a nonbinding proposal on Dec. 14 to buy out other shareholders for $14.25 per share, according to a filing Thursday with the Securities and Exchange Commission.

“We are confident that we can move forward with negotiating definitive documentation for the Transaction immediately, with the goal of entering into a binding material definitive agreement within two to three weeks, which we believe would maximize value, speed and certainty for Tribune’s other stockholders,” Alden said in the filing.

The potential offer represents an 11% premium to the stock’s $12.79 closing price Wednesday, and would require board and shareholder approval. Alden said in the filing it could finance the transaction with cash on hand and would not require third-party debt or equity to complete the deal.

In addition to the Chicago Tribune, Tribune Publishing 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.

A New York-based hedge fund with a reputation for sweeping layoffs at its newspaper properties, Alden owns about 200 publications through an operating company known as MediaNews Group. Its larger newspapers include the Denver Post, San Jose Mercury News and the St. Paul Pioneer Press.

Alden acquired its 32% stake in Tribune Publishing in November 2019, mostly through buying former nonexecutive chairman Michael Ferro’s holdings. In total, Alden purchased 11.5 million shares of Tribune Publishing for $145.4 million.

In the Dec. 14 letter to the Tribune Publishing board, which was included in the regulatory filing, Alden said combining the two newspaper chains creates value that justified offering a premium price for Tribune Publishing’s outstanding shares.

Launched in 2007, the hedge fund turned its focus to newspapers during the Great Recession, buying stakes in companies that had declared bankruptcy such as MediaNews, Philadelphia Media Network and Journal Register.

On Thursday evening, Tribune Publishing issued a statement saying its board had designated a special three-member committee of independent directors and hired financial adviser Lazard to review Alden’s acquisition proposal.

Tribune Publishing had $90 million in cash at the end of September, according to its third-quarter financial filings.

On Thursday, Tribune Publishing announced that it closed the sale of the BestReviews ecommerce website to TV station owner Nexstar Media Group for $160 million, further bolstering its cash position.