Alden Already Puts Tribune Publishing In Debt

It didn’t take long for Alden Global Capital to put its imprint — and significant debt — on Tribune Publishing, after closing its $633 million acquisition of the Chicago-based newspaper chain Monday.The Chicago Tribune reports the New York-based hedge fund leveraged Tribune Publishing with two loans totaling $278 million, removed CEO Terry Jimenez and installed Alden President Heath Freeman to lead the company, according to a Securities and Exchange Commission filing Tuesday.

Regulatory filings indicated Alden completed its purchase of Tribune Publishing late Monday, taking the Chicago-based newspaper chain private and adding the Chicago Tribune and other major dailies to the hedge fund’s growing portfolio.

A distressed investment hedge fund with a reputation as one of the industry’s most aggressive cost-cutters, Alden becomes the second-largest newspaper owner in the U.S. behind Gannett. Alden also owns MediaNews Group, whose larger newspapers include the Denver Post, San Jose (California) Mercury News and the St. Paul (Minnesota) Pioneer Press.

While Alden’s $633 million offer was fully financed, the hedge fund was able to use Tribune Publishing’s cash on hand and reserved the right to have the newspaper chain take on up to $375 million in debt to close the deal, according to its equity commitment letter filed with the SEC.

Alden exercised that financing option with two loans, according to Tuesday’s filing, including a $218 million five-year term loan to finance the merger through Cerberus Business Finance.

A second $60 million loan was taken out with MNG Enterprises, the parent company of Alden’s other newspaper chain, MediaNews Group. That loan matures in 2027.

Tribune Publishing was debt-free, profitable and had more than $250 million in cash as of its first-quarter earnings report.

In addition to the Chicago Tribune, Tribune Publishing owns The Baltimore Sun; the Hartford Courant; the Orlando (Florida) Sentinel; the South Florida Sun Sentinel; the 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.

The New York Daily News was sold to Alden in a separate transaction, according to the filing.

The entire seven-member Tribune Publishing board was removed as part of the transaction, including Alden founder Randall D. Smith. Freeman replaces Smith on the board, joined by two Alden executives and a representative of MNG Holdings, which is controlled by Alden.