Hold on, now…The chances of snatching Tribune Publishing from the jaws of hedge fund/newspaper strangler Alden Global Capital have just increased significantly, with a big investor having stepped forward.
I wrote last week that Alden was “poised to take over Tribune Publishing,” with its $630 million offer for the Tribune chain, which includes such distinguished papers as the Chicago Tribune, The Baltimore Sun, the Hartford Courant, the Orlando Sentinel and the South Florida Sun-Sentinel.
Alden already owns 32 percent of Tribune and controls three of seven spots on its board of directors.
The wrinkle in the deal began when a Maryland hotel magnate named Stewart W. Bainum Jr. offered to buy The Baltimore Sun and two other Maryland papers owned by Tribune for $65 million and turn them over to a nonprofit he would create. Bainum, chairman of Choice Hotels International, had a nonbinding agreement to buy the three papers, but negotiations over terms faltered, and on March 16, Bainum offered to buy the whole company at a slightly higher price — $650 million — than Alden had agreed to pay.
The problem was, he couldn’t swing the deal on his own, and it appeared the transaction with Alden would go forward. Last week, however, a possible white knight stepped forward in the person of Hansjorg Wyss, former chief executive of the medical device manufacturer Synthes. Wyss (pronounced Vees) has teamed up with Bainum, and together they appear to have the financial heft to swing the deal. (Ten years ago, Wyss led the sale of Synthes to Johnson & Johnson for $20 billion.)
Judging from what Wyss told The New York Times, it appears he, along with Bainum, could be the savior this once-great newspaper company needs to get back on track after nearly 15 years of being mishandled and abused by misguided and reckless owners.
“I have an opportunity to do 500 times more than what I’m doing now,” Wyss, who lives in Wyoming, was quoted as saying.
He added this about the Chicago Tribune: “Maybe I’m naive, but the combination of giving enough money to a professional staff to do the right things and putting quite a bit of money into digital will eventually make it a very profitable newspaper.”
The pivotal player in the drama now is a surgeon-turned-entrepreneur named Patrick Soon-Shiong, who, along with his wife Michele B. Chan, bought The Los Angeles Times and the San Diego Union-Tribune from Tribune a few years ago for $500 million.
All eyes are on Soon-Shiong and Chan because they own 24 percent of Tribune and could quash the Alden deal on their own. They could do so because sale of Tribune requires regulatory approval and “yes” votes from company shareholders representing two-thirds of the non-Alden stock.
Soon-Shiong has given no clue, however, where his intentions lie. A possible indicator of which direction he might turn cropped up last month, though, when the Wall Street Journal reported that Soon-Shiong was exploring the possibility of selling the LA Times and the San Diego paper.
The Journal article said options being considered included “an outright sale of the entire company, bringing in an additional investor…or transferring management of the San Diego publication to another company, possibly Alden Global Capital Inc.’s MediaNews Group.”
Speculation has been that Soon-Shiong might have become disillusioned after spending hundreds of millions of dollars over and above the purchase price to try to invigorate the papers and make them profitable, or more profitable, in the long run. Now that they are privately held, their financials are not a matter of public record.
Soon-Shiong quickly took to Twitter to deny the report, writing: “WSJ article inaccurate. We are committed to the @LATimes.”
At odds with his unequivocal denial, however, was the fact that the Wall Street Journal article had noted that Soon-Shiong did not respond to a request for a comment before it published the article.
A Los Angeles Times story about the WSJ article said it “unnerved journalists who work at Soon-Shiong’s properties.”
I can understand why.
And now, once again, the stakes are high not only for journalists and journalism at the LA and San Diego papers, but also for nearly 3,000 employees working at Tribune Publishing.
I hope, for once, the good guys prevail in this new, awful era of hedge-fund newspaper owneership.