Alden Global To Acquire Remainder of Tribune Publishing in Deal Valued at $630 Million
Image source: Tribune Publishing
Tribune Publishing Co (Nasdaq: TPCO), one of the country’s largest newspaper chains, will be fully acquired by hedge fund Alden Global Capital in a deal that values the company at $630 million.
Under the terms announced Tuesday, Alden will acquire the remaining shares it doesn't already own of Tribune Publishing for $17.25 apiece and take the company private. Tribune owns newspapers including the New York Daily News, Chicago Tribune, Sun Sentinel and Orlando Sentinel.
Alden already controls MediaNews Group, a large newspaper chain that owns dozens of publications including the Boston Herald and the Denver Post, and has a well-documented reputation for making drastic cuts at newspapers it acquires.
After Alden became Tribune Publishing’s largest shareholder in November 2019, with a 31.6% stake and three seats on the company’s seven-member board, unions at Tribune-owned newspapers began worrying about the potential for a takeover.
Tribune employees expressed their concern in a December 2019 letter to the publishing board, citing Alden’s “well-documented history of extracting short-term profits from already-lean operations by cutting newsroom jobs and denying fair wages and benefits.”
In January 2020, Tribune offered buyouts to employees for the second time in two years, while unions at the newspapers pushed for alternative buyers.
Even prior to the coronavirus outbreak, the newspaper industry was struggling with declining revenues and transitioning to a digital landscape, but the pandemic stressed newspapers even further, prompting companies such as Tribune to cut costs through furloughs and pay reductions.
Tribune Publishing announced the closing of newsrooms in August 2020 at several of its newspapers, including the New York Daily News and the Orlando Sentinel, and said the papers will still be published with employees working from home as they had been over the past year.
Philip G. Franklin, chairman of the board and member of a special committee that evaluated Alden’s proposal and potential alternatives, said in a statement, “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,” said Franklin.
In Tuesday’s press release, Alden announced it agreed to sell the Baltimore Sun Media Group to Sunlight for All Institute, a non-profit led by Stewart Bainum Jr., chairman of hotel chain Choice Hotels International.
His organization said it will run the newspapers “for the benefit of the community.”
Source: Equities News