Hedge fund to purchase Tribune Publishing

In another sign of the financial industry’s increasing influence on the newspaper business, Tribune Publishing, the publisher of nine major metropolitan dailies including the Chicago Tribune and the Daily News, announced Tuesday that it had agreed to give complete ownership of the company to Alden Global Capital, a hedge fund that has drastically cut costs at newspapers it controls.

Alden has pursued full ownership of Tribune Publishing for years and was already a 32 percent stakeholder in the public company, which dates to the 1847 founding of The Chicago Tribune. On Tuesday, Tribune and Alden said the hedge fund would buy the remaining shares for $17.25 apiece, putting the company’s valuation at $630 million. The companies said they expected to close in the second quarter this year.

The Baltimore Sun, one of Tribune Publishing’s major papers, will not be part of the final arrangement. Under the agreement, it will go to a nonprofit formed by Stewart Bainum Jr., a Maryland hotel executive. Tribune had previously disclosed its talks with Bainum.

Philip Franklin, the chairman of the Tribune Publishing board, said in a statement that the agreement with Alden was for “a premium, all-cash price, which the committee concluded was superior to the available alternatives.”

In a separate statement, Alden said: “Our commitment to ensuring the sustainability of robust local journalism is well established, and this is part of that effort.”

The deal still requires approval by the shareholders who own the roughly two-thirds of Tribune Publishing stock not owned by Alden. The largest holder of those shares is Dr. Patrick Soon-Shiong, a medical entrepreneur who with his wife, Michele Chan, bought a group of California papers, including The Los Angeles Times and The San Diego Union-Tribune, from Tribune Publishing in 2018 for $500 million. SoonShiong owns roughly 25 percent of Tribune Publishing.

Alden moved closer to its goal of taking over Tribune Publishing in December 2019, when it revealed that it had bought its 32 percent stake. A year later, it proposed buying the remaining shares for $14.25 each.

The combination of Tribune and MediaNews Group, an Aldencontrolled chain of roughly 100 newspapers, including more than 60 dailies, would put another significant chunk of newspaper publishing under the strong influence or outright control of the financial industry.