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Maryland businessman and his partner up the stakes in quest to buy The Baltimore Sun’s parent company

Two months after a hedge fund agreed to buy Tribune Publishing for $630 million, a Maryland businessman and a Swiss billionaire have submitted a potentially “superior proposal,” the company said Monday, escalating the battle for control of the Chicago Tribune, The Baltimore Sun and other major publications.

Newslight, formed last week by Stewart Bainum Jr. and Hansjorg Wyss, submitted an offer to buy Tribune Publishing for $680 million — at $18.50 per share — and will begin negotiating terms of the deal, Tribune said in a statement. Tribune’s Maryland publications include The Sun, the Carroll County Times and the Capital Gazette in Annapolis.

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The announcement seemingly shifts Alden Global Capital into the underdog role for the first time since late 2019, when it upped its stake in Tribune to 32%, gained two board seats and made clear its intentions to merge Tribune into its private company, Digital First Media.

The Newslight bid also underscores the steep escalation in the value of Tribune shares since Dec. 31, 2020, when Alden announced that it would pay $14.25 a share for all outstanding shares, valuing the company at around $520 million.

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In its public filing Monday, Tribune emphasized that the current deal with Alden remains in place while negotiations continue.

“The special committee’s determination allows Tribune to engage in discussions and negotiations with, and provide diligence information to Newslight … but does not allow Tribune to terminate the Alden Merger Agreement or enter into any merger agreement with Newslight, Mr. Bainum or Mr. Wyss,” the statement said.

Bainum and Wyss could not be reached for comment Monday, and Alden Global Capital has not spoken publicly during offers and negotiations that have stretched on for nearly 18 months. A recording at a phone number listed for the company said it was “a nonworking” number for Alden Global.

Tim Ragones, a spokesman for the Tribune Special Committee, said Monday that he could not talk about the status of the bids or what would come next in the process.

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As Newslight and Tribune begin their negotiations, a key question remains: Will Alden decide to up its bid yet again, or choose to walk away with a profit of roughly $100 million in just two years, including a $20 million bonus if Tribune breaks the existing agreement?

“Alden’s got a number [at which it will decide to sell or increase its bid]. We just don’t know what the number is,” said Ken Doctor, a news industry analyst with the Nieman Lab journalism think tank who has covered Alden’s media holdings extensively. “They will make a calculation on whether they can make more money by increasing their offer, or if they are better off financially by taking the cash and walking away.

“With these guys, it’s just about the money,” Doctor said. “They aren’t for newspapers, and they aren’t really against newspapers. Newspapers are just an instrument to make money, and they are very good at it.”

Alden has been harshly criticized over its history of acquiring newspapers, cutting staff and reducing the quality of its journalism to secure profits. Chicago Tribune reporters wrote open letters critical of the company, and The Sun’s news guild has led efforts to find local buyers who could help block the sale to Alden.

Several of Alden’s Digital First Media publications, notably The Denver Post, have rebelled openly against the ownership through editorials on Digital First’s own pages.

Alden bought 25% of Tribune Publishing from former Tribune CEO Michael Ferro for about $13 a share in 2019, according to SEC filings, and had already accumulated about 7% at lower per-share costs. At Newslight’s current bid, Alden’s profit from its shares alone would be about $86 million, according to an analysis by the nonprofit Poynter Institute.

Alden, which now has three seats on Tribune’s board, has a big advantage over Newslight because it has access to all of Tribune’s financial and operating information, Doctor said.

“Alden not only has seen the books, but they are owners, and they participated a great deal in the further cost-cutting that [Tribune Chief Executive Officer] Terry Jimenez did,” Doctor said.

“The new buyers know very little. They know top-line numbers. They don’t know how well digital circulation numbers are really doing. What is the circulation revenue? How many [new customer] starts are sticking, and, importantly, at what price? They are at a tremendous disadvantage.”

Doctor said a wild card in Alden’s calculations will be the impact that owning marquee newspapers in the Tribune chain will have on improving the bottom line at Digital First Media, which owns nearly 200 print and digital media outlets.

“We are still early here, probably weeks away from seeing where this will end,” Doctor said. “It will be interesting to see if Alden decides to increase its bid or say, ‘We’ll take these guys’ money — they are the greater fools and we are out of here.’ "

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