July 31, 2020

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From the outside looking in, it has appeared that Tribune Publishing had been accepting the growing influence of its largest shareholder, hedge fund Alden Global Capital. But a Securities and Exchange Commission filing and press release this week indicated it has now adopted a traditional defense to an unwelcome takeover attempt.

Hold on, though. It is less than clear whether the move defends Alden’s 32% stake against a bid by someone else, or whether the “poison pill” making a takeover much more expensive could also be triggered if Alden or 25% holder Dr. Patrick Soon-Shiong increased their stake by another 10% (or tried to sell).

A Tribune spokesman declined to amplify on the wording of the release. Even in the arcane world of takeovers and mergers, it is rare to encounter an announcement so confusing as to be nearly unintelligible.

The company is offering a so-called “rights agreement” that gives shareholders a right to buy stock at a discount or be paid a two-to-one premium if a holder assembles stock for a takeover bid.

Tribune’s board of directors would be the judge of what is a friendly or unfriendly bid. It is split three-three between holdover Tribune representatives and newer Alden-affiliated ones — with CEO Terry Jimenez the seventh vote.

The company — whose papers include the Chicago Tribune, Baltimore Sun and South Florida Sun Sentinel — used a similar tactic in successfully fending off a takeover offer from Gannett several years ago.

Meanwhile, bankruptcy court approval of McClatchy’s acquisition by hedge fund Chatham Asset Management is currently scheduled for next Thursday. This week’s court motions yielded only minor objections to the deal.

Rick Edmonds is Poynter’s media business analyst. He can be reached at redmonds@poynter.org.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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