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Tribune Publishing sets May 21 shareholder vote on Alden merger

Tribune Publishing set a May 21 date for shareholders to vote on its deal to sell the Chicago-based newspaper chain to hedge fund Alden Global Capital for $633 million.

Alden, Tribune Publishing’s largest shareholder with a 31.6% stake, reached an agreement in February to buy the rest of the company at $17.25 per share and take it private. The proposed merger will require approval from two-thirds of Tribune Publishing’s other shareholders.

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On Monday, Tribune Publishing said it ended discussions with a group headed by Maryland hotel executive Stewart Bainum after it was notified that Swiss billionaire Hansjörg Wyss had pulled out of a fully financed nonbinding offer of $680 million for the company. A special committee of the Tribune Publishing board determined that the proposed $18.50 per share bid by the Bainum-Wyss entity, known as Newslight, no longer could be reasonably expected to lead to a “superior proposal” to Alden’s offer.

The Tribune Publishing board members and executive officers intend to vote all of their shares in favor of the Alden merger, with the exception of CEO Terry Jimenez, who said he plans to vote against the proposal, the company said in a Securities and Exchange Commission filing Tuesday.

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Shareholders of record as of April 15 will get one vote for each share. Tribune Publishing will report the results within four days of the shareholder meeting, according to the SEC filing.

In addition to the Chicago Tribune, Tribune Publishing owns The Baltimore Sun; the Hartford (Connecticut) Courant; the Orlando (Florida) 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.

The Alden deal’s success hinges on securing the votes of California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 23.7% of Tribune Publishing’s 36.9 million outstanding shares. Soon-Shiong, who built his initial stake in Tribune Publishing at $15 per share in 2016, owns about 8.7 million shares of the company.

Soon-Shiong did not immediately respond to a request for comment Tuesday.

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If approved, Tribune Publishing said it expects the merger to be completed by the end of June.

Freedom Center, the Chicago Tribune's printing and distribution center, is seen March 30, 2021, in Chicago.
Freedom Center, the Chicago Tribune's printing and distribution center, is seen March 30, 2021, in Chicago. (Erin Hooley/Chicago Tribune/Erin Hooley / Chicago Tribune/Chicago Tribune/TNS)

The chairman of Maryland-based Choice Hotels International, Bainum signed a nonbinding agreement to buy The Baltimore Sun for $65 million upon Alden’s acquisition of Tribune Publishing. That deal hit a snag last month 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.

The Newslight partnership was premised on a long-term plan for Bainum to own The Baltimore Sun, Wyss to own the Chicago Tribune, and to sell off the rest of the company’s newspapers to individual or group owners, according to a source close to the situation.

While losing Wyss, the primary equity partner of the Newslight offer, dealt a significant blow to the rival bid, Tribune Publishing left a window open for Bainum to pursue other funding.

On Sunday, Tribune Publishing granted Bainum permission to speak to certain additional potential equity financing sources, according to Tuesday’s SEC filing.

Bainum is continuing to talk with other potential investors, and hopes to come back to Tribune with a fully funded offer by the end of next week, the source said Tuesday.

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