April 19, 2021

With Swiss billionaire Hansjörg Wyss out as a potential investor in a bid for Tribune Publishing, the company said Monday morning it has “terminated discussions” with his former partner, Maryland hotel owner Stewart Bainum Jr.

A contract is in place, awaiting shareholder approval, to sell Tribune Publishing to hedge fund Alden Global Capital. The special committee of independent directors said in a press release that it intends to honor the agreement.

A source familiar with Bainum’s thinking said Sunday that after Wyss withdrew Friday night, Bainum has been working to identify alternative investors and resubmit a bid valued at $680 million — $50 million more than Alden’s.

Tribune said it no longer thinks it reasonably likely Bainum’s effort will result in a “superior proposal.” Besides shutting down negotiations, Tribune will not be letting other potential investors examine its books, it said.

However the door is still open a crack, a Tribune source told me. If Bainum is back within the next week or two with a fully financed and firm offer, the special committee could reconsider and reopen discussions.

NewsGuild chapters at Tribune properties issued a statement saying “we remain optimistic that our newsrooms will end up in the hands of civic-minded investors and foundations who are ready, willing and eager to invest in them.”

The fight for Tribune has attracted widespread coverage, including in national outlets like The New York Times and The Wall Street Journal. For both the company as a whole and its individual markets like Chicago; Orlando; Fort Lauderdale; and Allentown, Pennsylvania; a turning point is likely. Deep cost-cutting in newsrooms and the rest of their operations is almost certain if Alden prevails.

So the case has been made for keeping Tribune Publishing’s local journalism as strong as possible in a tough time financially for the newspaper industry.

Practical issues remain. Investors — be they foundations or individuals — are deliberate in reaching decisions involving millions of dollars and need careful “due diligence” to be sure of what they are buying. Tribune’s timetable for finishing the deal this quarter is much faster.

The stock market seems to be betting on Alden’s winning. Tribune Publishing shares closed Friday at $18.37 a share, pennies less than the Bainum-Wyss bid of $18.50. By mid-afternoon, the stock had fallen to $17.45 — 20 cents a share more than Alden’s offer.

Bainum originally wanted to buy just The Baltimore Sun. He and Alden reached an agreement in December that a nonprofit he set up would pay $65 million and get Maryland’s leading paper.

Subsequently, he and Alden came to be at loggerheads on how much his group would pay for back-office, design and tech services now centralized in Tribune Publishing. The deal was canceled.

Should Bainum fail to put together a purchase of the whole company, he could try to put back together the original offer for just the Sun — though Alden might or might not agree to it.

(This is a breaking story and will be updated if more information is received)

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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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