Alden Global Capital, the New York-based hedge fund founded by Randall Smith in 2007, has reached an agreement to purchase all the equity of Tribune Publishing that it does not already own and take it private. The deal will close in the second quarter, the two companies said.
Alden is already Tribune’s largest shareholder (31.6%). It acquired that stake in November 2019, mostly through the purchase of the holding of the former nonexecutive chairman Michael Ferro.
Alden and Tribune announced their deal after Tuesday’s market close. Tribune stock (NASDAQ: TPCO) closed at $15.97. But the deal values the company at $583.4 million, or $17.25 a share.
The flagship of Tribune Publishing is the Chicago Tribune. But Tribune also owns the Baltimore Sun, the Hartford Courant (Connecticut), the Orlando Sentinel (Florida), the South Florida Sun Sentinel, the New York Daily News, the Capital Gazette (Annapolis, Maryland), The Morning Call (Allentown, Pennsylvania), the Daily Press (Newport News, Virginia) and the The Virginian-Pilot in Norfolk.
This is not a done deal. It will require the approval of two-thirds of the shareholders not affiliated with Alden, and it must survive regulatory scrutiny. Shareholder approval will turn on the views of two men: Patrick Soon-Shiong, who owns about 24% of the equity, and Mason Slaine, a former chairman of FT Media Holdings, who owns 8% of Tribune.
In December, at an earlier stage in the Alden-Tribune talks, Alden was offering $14.25 per share. Slaine at that time reportedly said the figure was too low. On Tuesday evening, reached for comment by Robert Channick of the Chicago Tribune, Slaine said “$17.25 was better than $14.25,” but was not yet ready to say he approves of the deal. He said that he is disappointed civic-minded Chicagoans didn’t attempt a purchase.
Alden has come under a lot of criticism in the past for a chainsaw approach to budget cutting at the newspapers it has acquired. It owns about 200 companies through its MediaNews Group. Its assets include the Denver Post, the San Jose Mercury News, and the St. Paul Pioneer Press. Observing the aftermath of some of those transactions, the media columnist for the Washington Post, Margaret Sullivan, has said that Alden is “one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism.”
Tribune plans to report its financial results for the fourth quarter and the full year 2020 early next month. But in light of this announcement and the pending transaction, it says that it will not host a conference call to discuss its financial results.