Wednesday, February 17, 2021

Hedge Fund Alden To Buy Tribune Publishing

Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million.

Announced Tuesday after the stock market closed, the deal would create one of the largest newspaper operators in the United States. It follows weeks of negotiations between a special committee of Tribune Publishing’s board and Alden, a hedge fund with a history of deep cost-cutting at its other newspaper properties.

Alden, already Tribune Publishing’s largest shareholder with a 31.6% stake, is offering $17.25 a share for the remainder of the company in a transaction that would take Tribune Publishing private. That amounts to Alden paying about $431 million for the 68% of shares it doesn’t already own.

The Chicago Tribune reports the agreed-upon price is $3 a share higher than a nonbinding proposal Alden presented in December. Since its interest in buying all of the company was made public in late December, shares of Tribune Publishing have steadily moved higher. On Tuesday, shares closed at $15.97 a share, giving the company a market capitalization of $583.4 million.

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.

As part of the deal, Alden signed a nonbinding agreement to sell the Baltimore Sun to Sunlight for All Institute, a public charity formed by Stewart Bainum Jr. In a Dec. 31 regulatory filing, Alden said it had a “brief conversation” with Bainum, chairman of Choice Hotels International, a Rockville, Maryland-based hotel chain, who expressed interest in “certain assets” of Tribune Publishing.

The deal, which the companies said should close in the second quarter, requires the approval of two-thirds of shareholders not affiliated with Alden and must pass regulatory scrutiny. It already has been approved by Tribune’s board. Three of the seven board seats are held by Alden representatives.

The deal comes as the newspaper industry continues to struggle in a digital media age. Revenue has been cut in half between 2008 and 2018 because of a precipitous decline in print advertising, according to data from Pew Research. During that same time, newsroom employment declined 25%.

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