Sun parent sticking with Alden for now over Bainum-Wyss bid
The special committee of Tribune Publishing’s board of directors continues to recommend shareholders approve a buyout of the company by a New York hedge fund even as it considers a higher offer from a Maryland businessman and a Swiss billionaire.
In an updated filing Wednesday with the U.S. Securities and Exchange Commission, the Chicago-based newspaper group cited a number of factors in the reasoning to endorse Alden Global Capital’s deal, valued at about $630 million, over a tentative $680 million offer by Maryland hotel executive Stewart Bainum Jr. and his business partner Hansjörg Wyss.
The filing cited the nonbinding nature of Bainum/Wyss’ $18.50 a share bid, its proposed use of more of Tribune Publishing’s cash on hand, Bainum’s expressed interest in just owning Baltimore Sun, owner of The Capital, and not all of Tribune Publishing, and the likelihood that the Alden deal for $17.25 a share could close more quickly.
The filing, however, remained preliminary. No shareholders meeting has been scheduled yet. The document states that lawyers for Bainum and Wyss only sent a draft of a merger agreement to Tribune Publishing’s lawyers Friday.
The Bainum/Wyss entity, known as Newslight LLC, continues to conduct due diligence, reviewing Tribune Publishing’s books, and expects to quickly conclude an agreement, according to the SEC filing.
The stock market appeared unmoved by Tribune Publishing’s filing with the company’s stock closing Wednesday up 4 cents at $18.33 a share, closer to the Bainum/ Wyss offer and more than a $1 more than Alden’s offer.
The filing disclosed that Wyss, who made his fortune in medical device manufacturing, is financing the bulk of Newslight’s bid. Wyss is putting up $505 million in equity, while Bainum, whose background is in developing hotels and nursing homes and who remains the chairman of Rockville-based Choice Hotels International, is putting up $100 million.
The filing also disclosed that Bainum is no longer negotiating the originally proposed acquisition of Baltimore Sun and its Maryland affiliates, which also includes the Carroll County Times, with Alden. He originally sought to acquire Baltimore Sun Media for $65 million as Alden purchased the rest of Tribune Publishing, which includes such newspapers as the Chicago Tribune, New York Daily News and Orlando Sentinel.
A representative of the Bainum/Wyss group declined to comment on the filing.
Alden, meanwhile, has said it would not vote its 32% stake in Tribune Publishing for any deal other than its own, according to the filing. That means any alternative deal must have the broad support of other shareholders, particularly Dr. Patrick SoonShiong, the owner of the Los Angeles Times who holds a 24.6% stake in Tribune Publishing.
Tribune Publishing acknowledged in the filing that Newslight’s offer could lead to a superior proposal and such a transaction “would likely receive significant support from stockholders other than Alden.”