April 2, 2021

It’s been a quiet few days in the competition between hedge fund Alden Global Capital and hotel entrepreneur Stewart Bainum Jr. (plus his group of like-minded wealthy men) to acquire Tribune Publishing.

To review, Alden has an offer, tentatively accepted by the company, to pay $17.25 a share for the Tribune stock it does not already own. Bainum has put in an upset bid of $18.50 a share (though his bid is contingent on finding financing).

Tribune shares closed at $18.03 Thursday, which says Wall Street is betting that Bainum’s offer or an even higher one will prevail.

In the manner of famous corporate raiders like Carl Icahn, however, Alden is set up to win either way. It bought most of its 32% stake — 11.5 million shares — from former Tribune Publishing Chairman Michael Ferro in November 2019 at prices between $9 and $13 a share.

So at Bainum’s offer of $18.50, Alden would walk away with $86 million, a 68% appreciation on its investment.

Plus the fine print of the tentative agreement says Alden gets a $20 million penalty if Tribune Publishing sells to someone else.

I am sure that Alden figures to make more cutting staff and selling off real estate if it gains control of the chain’s Chicago Tribune and eight other metros. If not, it’s nice to be staring at an $106 million consolation prize.

This piece originally appeared in The Poynter Report, our daily newsletter for everyone who cares about the media. Subscribe to The Poynter Report here.

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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…
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