Tribune Publishing is moving forward with plans to be acquired by Alden Global Capital and has ended discussions with a Maryland hotel executive interested in purchasing the Chicago-based newspaper chain.
In a Monday morning news release, Tribune Publishing said it was notified Saturday that Swiss billionaire Hansjörg Wyss had pulled out of a fully financed nonbinding offer of $680 million for the company made with Choice Hotels Chairman Stewart Bainum. Because that offer no longer can be reasonably expected to lead to a “superior proposal” to the $633 million offered by Alden, Tribune Publishing said it is no longer allowed to have discussions and negotiations, or share information, with Wyss/Bainum entity known as Newslight or its principals.
Shares of Tribune Publishing fell about 5% Monday morning, trading at $17.44 a share, after closing at $18.37 a share Friday.
Bainum, in his letter to the special committee of Tribune Publishing’s board that is considering proposals, said while Wyss no longer was interested in his previous level of commitment, Wyss “communicated to me that he remains interested in assisting in a potential transaction to make it successful.”
Wyss, an octogenarian former CEO of medical device manufacturer Synthes who lives in Wyoming and runs a conservation foundation, teamed up with Bainum last month. Wyss had agreed to put up $505 million and Bainum $100 million to complete the $18.50-a-share purchase without outside financing, according to a Wednesday filing with the Securities and Exchange Commission.
Bainum said in the letter that he remains committed to the bid by putting up $100 million of equity financing and plans to continue talks with potential equity financing sources. He said his advisers have “substantially completed the necessary due diligence of Tribune and there remain only a few issues to be negotiated in the definitive transaction documentation.”
However, Tribune said Monday the Feb. 16 merger agreement between hedge fund Alden, which owns 31.6% of Tribune Publishing, includes certain restrictions of Tribune’s ability to engage with Bainum. One of those conditions is because Bainum has not secured the necessary financing.
The Tribune board’s special committee said it continues to recommend Alden’s bid of $17.25 a share. No date has been set yet for shareholders to consider that bid.
Tim Ragones, a spokesman for the special committee of the Tribune Publishing board vetting the offers, declined to comment. Wyss and a spokesman for Alden did not immediately respond to a request for comment.
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.
