With the collapse of a competing offer for the parent company of the Chicago Tribune over the weekend, it’s full speed ahead for Alden Global Capital in its bid to acquire complete control of Tribune Publishing.
Swiss billionaire Hansjörg Wyss withdrew his participation in a $680 million bid for Tribune Publishing with Maryland hotel executive Stewart Bainum Jr. through their newly formed Newslight LLC. After examining Tribune Publishing finances, Wyss backed out.
While Bainum is said to remain committed to pursuing ownership of the company with other investors, Wyss’s withdrawal effectively scuttles the deal, as far as the Tribune Publishing board is concerned. That leaves the $635 million offer of New York-based hedge fund Alden Global Capital as the only one standing.
On Monday Tribune Publishing issued a press release headlined: “Tribune Publishing Special Committee Determines April 1 Proposal From Stewart Bainum and Hansjörg Wyss No Longer Reasonably Expected to Lead to a ‘Superior Proposal’ . . . Definitive Binding Merger Agreement With Alden Global Capital Remains in Place; Tribune Board Continues to Recommend That Stockholders Vote in Favor of Its Approval.”
The text reads in part: “In light of Mr. Bainum’s April 17 letter, the special committee of Tribune’s board of directors, in consultation with its legal and financial advisors, has determined that the Newslight proposal would no longer reasonably be expected to lead to a “Superior Proposal,” as defined in Tribune’s merger agreement with affiliates of Alden Global Capital LLC.
“As such, Tribune is no longer permitted to engage in discussions and negotiations with, or provide diligence information to, Newslight and its principals in connection with their proposal, and accordingly has terminated such discussions and negotiations with, and access to diligence information for, Newslight and its principals.”
Whoever ultimately wins control of the company will take over a substantially smaller Chicago Tribune than ever.
Since Alden Global Capital acquired a 32 percent share of Tribune Publishing in November 2019, staffing in Chicago Tribune city and suburban newsrooms has fallen 32 percent, according to a NewsGuild report published by Poynter.org.
Alden Global Capital has a record of slashing newsroom budgets and underfunding local journalism.
Saturday’s comment of the day: Ken Davis: This is truly bad news. But I’m not persuaded that Mr. Wyss dropped out strictly for financial reasons. Last week’s NYT article revealing his liberal activism and broadly hinting that he wanted to use the paper to advance his causes may have sparked all kinds of unanticipated blowback. Maybe he decided he didn’t want the relentless scrutiny. It’s heartening that the original investor, Stewart Bynum, says he wants to continue the pursuit. It’s a huge hill to climb, but let’s hope he succeeds.