New Bidder Emerges for Tribune Publishing

From a Wall Street Journal story by Cara Lombardo and Luke I. Alpert headlined “Rival Group Makes Fully Financed, Roughly $680 Million Bid for Tribune”:

A Maryland hotel magnate and a Swiss billionaire have made a bid for Tribune Publishing Co. that the newspaper chain is expected to favor over a takeover deal it already struck with hedge fund Alden Global Capital.

A special committee of Tribune’s board has determined that a roughly $680 million, $18.50-a-share bid submitted late last week by Choice Hotels International Inc. Chairman Stewart Bainum and Hansjörg Wyss is reasonably likely to lead to a proposal that is superior to Alden’s $635 million deal. That is legal deal-speak indicating Alden may need to raise its bid or risk losing the deal.

The decision came after the two men indicated they plan to personally contribute more than $600 million combined, up from a previous total of $200 million.

Now that the group has submitted a fully financed bid, it will get access to private financial data to conduct due diligence and negotiate other terms, a big step toward completing an agreement that could replace Alden’s, they said….

If Alden loses the deal, it would mark a stunning, 11th-hour turnaround for the New York hedge fund, and a major victory for critics who say its model of aggressive cost-cutting has hurt the local news industry. Alden had spent nearly a year-and-a-half positioning itself to take over Tribune, publisher of nine large-market daily newspapers including the Chicago Tribune, New York Daily News and the Baltimore Sun….

Alden owns a newspaper company called MediaNews Group that has amassed a portfolio of about 70 daily papers through a string of acquisitions, most notably the Denver Post, San Jose Mercury News and St. Paul Pioneer Press. The hedge fund has been a lightning rod for criticism in the media industry for aggressive cost-cutting at titles it acquires.

Over the past decade, it has slashed newsroom staff by more than 75% at many of its papers, according to the News Guild. At one paper, the Norristown Times Herald in Pennsylvania, the newsroom went from 45 in 2012 to just five today, the union said.

That approach helped lead to the rival offer, with reporters at several Tribune papers launching campaigns to find alternate bidders. Mr. Wyss, who founded a medical-device maker later bought by Johnson & Johnson, has said he was inspired to join with Mr. Bainum after reading such a plea from reporters at the Chicago Tribune.

As is typical, the Tribune board has continued to recommend Alden’s deal to shareholders and will do so until another proposal is officially deemed superior. Assuming that happens in the coming weeks, Alden would have a four-day window in which to match the counterbid or walk away with a breakup fee….

People close to Mr. Bainum have said that he has long been saddened by the decline of the Sun, his hometown paper. He has said that if his bid is successful, he intends to ultimately hand control of the paper to a nonprofit trust.

Florida investor Mason Slaine, who holds a 3.4% Tribune stake, had expressed interest in joining the effort in order to acquire the publisher’s Orlando Sentinel and Sun Sentinel in Fort Lauderdale, but isn’t part of it, the people said….

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