Tribune Publishing’s board backs Alden’s $630M offer for company

CHICAGO — Tribune Publishing’s board is recommending shareholders approve Alden Global Capital’s $630 million offer to buy the Chicago-based newspaper company, but gave a Maryland hotel executive the green light to pursue financing for a higher bid, according to a Securities and Exchange Commission filing Tuesday.

Alden, a New York-based hedge fund and Tribune Publishing’s largest shareholder with a 31.6% stake, reached an agreement last month to buy the rest of the company at $17.25 per share and take it private. The deal requires approval from two-thirds of Tribune Publishing’s other shareholders in a proxy vote to be scheduled.

Regulators also have to sign off on the deal.

In addition to the Chicago Tribune, Tribune Publishing owns The Baltimore Sun; the Hartford Courant; the Orlando Sentinel; the South Florida Sun Sentinel; New York Daily News; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.

Stewart Bainum, chairman of Maryland-based Choice Hotels International, who signed a nonbinding agreement to buy the Baltimore Sun for $65 million upon Alden’s acquisition of Tribune Publishing, made an $18.50 per share offer for the whole company on March 16, Tribune Publishing said in the SEC filing.

Bainum has committed $100 million but needs additional financing for the proposed $650 million acquisition, according to the filing.

Earlier this month, The New York Times reported that negotiations between Bainum and Alden had hit a snag over the terms of a transition services agreement for the Sun, leading Bainum to seek an exit from the deal to pursue buying all of Tribune Publishing.

A three-member special committee of the Tribune Publishing board, which has been vetting the Alden offer, agreed to “grant a waiver of certain restrictions” to allow Bainum to pursue financing for the larger bid, according to the filing.

Tim Ragones, a spokesman for the Tribune Publishing special committee, declined to comment. A Bainum spokeswoman and a spokesman for Alden did not respond to requests for comment.

Alden has three of seven seats on the Tribune Publishing board, but its representatives recused themselves during the Feb. 15 vote to recommend shareholders approve the $17.25 per share offer. Tribune Publishing CEO Terry Jimenez was the sole dissenting vote, according to the SEC filing.