Tronc to sell LA ‘Times’ and other newspapers for $500 million

Tronc Inc. said on Wednesday it would sell the Los Angeles Times, the San Diego Union-Tribune and some other newspapers to billionaire investor Patrick Soon-Shiong for $500 million in cash.

Shares of Tronc rose more than 40% to $25.72 in premarket trading.

Tronc expects to use the cash proceeds from the deal to boost its digital businesses by increasing investments and acquisitions.

“This transaction allows us to fully repay our outstanding debt, significantly lower our pension liabilities and have a substantial cash position following the close of the transaction,” Tronc chief executive Justin Dearborn said in a statement.

Tribune Interactive will become the home to Tronc’s digital assets and will be led by Ross Levinsohn, a former Los Angeles Times publisher and chief executive.

Levinsohn took an unpaid leave of absence last month following disclosure of sexual-harassment allegations against him while he worked at other companies. Tronc said an independent investigation did not find any wrongdoing.

Soon-Shiong, a major shareholder in Tronc and chief executive of NantHealth Inc., will buy the publications through his private investment vehicle Nant Capital LLC.

Nant Capital will also assume $90m. in pension liabilities as part of the deal, which is expected to close in the late first quarter or early second quarter of 2018.

The divested publications brought in about $470m. in net revenue for the 12-month period ended September 30, 2017.

In a separate statement, Tronc said it acquired a majority ownership stake in BestReviews, a San Francisco-based company that provides online product reviews.

The Times, acquired by Tronc’s predecessor, Tribune Co., in 2000, has undergone several management changes and rounds of layoffs, reflecting a struggle by newspapers in general to adapt to digital media.

(Reuters)