Hedge fund Alden Global Capital to buy Tribune Publishing for $630 million

Chicago Tribune

Alden Global Capital, the New York-based hedge fund known for bleeding newspapers dry, has reached agreement to buy the parent company of the Chicago Tribune in a deal valued at $630 million.

Chicago-based Tribune Publishing announced Tuesday that it has accepted Alden’s bid to acquire the 68 percent of company shares it does not already own. Pending approval from shareholders and regulatory approval, the sale is expected to close in the second quarter.

In addition to the Chicago Tribune, the deal includes the New York Daily News, Hartford Courant, South Florida’s Sun Sentinel and Orlando Sentinel, Virginia’s Daily Press and The Virginian-Pilot, and The Morning Call of Lehigh Valley, Pennsylvania. The Baltimore Sun will be sold to Sunlight for All Institute, a public charity.

“Quality journalism has been Tribune’s driving principal throughout its history and will continue to drive our business well into the future,” Terry Jimenez, CEO of Tribune Publishing, wrote in an email to employees. “The actions we have taken to drive digital growth and invest in high-quality content allow our newsrooms, our sales teams and all of our employees across the organization to deliver essential journalism and marketing solutions to the communities we serve.”

Judging from initial reaction, few among the newspaper’s journalists — past and present — were buying it.

“Absolutely terrible news,” tweeted reporter Gregory Pratt, president of the Chicago Tribune Guild. “We will continue to fight for our newsroom and our city, no matter what happens next. But @ChicagoTribune needs local ownership with a civic conscience. We are now at the opposite extreme.”

“This is, without question, bad for Chicago,” tweeted reporter Megan Crepeau.

David Axelrod, a former political reporter for the Tribune who now heads The University of Chicago Institute of Politics, tweeted: “Sad to see it fall into the hands of these scavengers. RIP.”

In a statement released by Tribune Publishing, board chairman Philip G. Franklin said: “Over the past year, the company has taken a number of actions to adapt to an ever-changing business and industry environment, including the impact of COVID-19. These actions included strengthening the company’s financial position, driving digital growth and investing in high-quality content to better serve customers, employees and communities.

“This positioning enabled the special committee to negotiate a premium, all-cash price, which the committee concluded was superior to the available alternatives.”

Alden first gained a foothold in Tribune Publishing when it bought the shares of former chairman Michael Ferro in 2019.

Here is the text of the email to employees from Jimenez:

Dear Colleagues,
 
I would like to update you regarding an important announcement about Tribune Publishing.
 
This afternoon we announced an agreement to be acquired by Alden Global Capital, Tribune’s largest shareholder. In addition to the acquisition of Tribune, Alden has signed a non-binding term sheet to sell Baltimore Sun Media Group to the public charity Sunlight for All Institute. The release announcing these changes is attached.
 
Alden has been an investor in Tribune since November 2019 and in December 2020 submitted a proposal to purchase the rest of Tribune. In response to that proposal, Tribune’s Board of Directors formed a special committee composed of three independent Board members unaffiliated with Alden. With the help of financial and legal advisors, the special committee spent the last two months thoroughly evaluating Alden’s proposal and potential alternatives, and ultimately concluded that the acquisition was in the best interest of the company’s shareholders.
 
Today’s announcement is the first step of a process that will take several months. The transaction is expected to close in the second quarter of 2021 and is subject to regulatory review, the approval of holders of two-thirds of Tribune common stock not owned by Alden, and other customary closing conditions. Upon completion of the transaction Tribune will become a privately held company, and its common stock will no longer be listed on any public market. We will remain focused on our journalistic mission throughout this process and I will be working closely with the Alden team to ensure a smooth transition across the organization.
 
Quality journalism has been Tribune’s driving principal throughout its history and will continue to drive our business well into the future. The actions we have taken to drive digital growth and invest in high-quality content allow our newsrooms, our sales teams and all of our employees across the organization to deliver essential journalism and marketing solutions to the communities we serve.
 
The leadership team and I thank you for your continued dedication to our communities, our readers, our customers and to Tribune.
 
We will be hosting a town hall to discuss the announcement and answer your questions. We will follow up with an invite.
 
Best,
 
Terry Jimenez
Chief Executive Officer
Tribune Publishing