Hansjörg Wyss has withdrawn from a bid to buy Tribune Publishing, ending his attempt at being a Swiss savior of the Chicago Tribune, two sources said Saturday.
A billionaire with an interest in environmentalism, Wyss had partnered with hotel executive Stewart Bainum Jr. to make a $680 million offer, or $18.50 a share, for the company. The sources said he left the deal after viewing company books and that Bainum is seeking other investors to keep the offer alive.
His departure could cause Tribune Publishing directors to schedule shareholder approval of a buyout offer from hedge fund Alden Global Capital at $17.25 a share. Alden has scooped up financially troubled dailies and weeklies around the country and has faced widespread criticism for slashing news coverage.
Wyss sought to help Bainum keep Tribune Publishing out of Alden’s hands and to break up the company, selling its nine daily newspapers to investors wanting local titles. But two sources, both close to the deal and speaking on condition of anonymity, said Wyss withdrew after deciding he’d have to spend too much to elevate the Chicago Tribune to a national role.
The founder of medical device maker Synthes, Wyss had hoped to make the paper prominent in environmental coverage and other areas. Born in Switzerland, he lives in Wyoming. His Wyss Foundation is particularly interested in protecting Wyoming’s Hoback Basin and other Western lands.
“He wanted a publication that would support the goals of his foundation and he saw that would be hard to do,” one person said. “Stewart is working on a Plan B that involves other investors and financing options.”
A spokesman for Tribune Publishing’s board had no comment Saturday.
Bainum has fielded inquiries from investors drawn to the company’s other papers, such as the New York Daily News, the Hartford Courant and the Morning Call of Lehigh Valley, Pennsylvania, the source said. “This is a deal he has a lot of confidence in,” the person said.
Bainum’s own interest is the Baltimore Sun. He had an agreement with Alden to acquire the paper for a nonprofit, but it was scrapped amid disagreement over details.
Wyss’ interest in the Chicago Tribune was so strong that no one else has stepped forward for the paper, the sources said. “We’re a little behind the 8-ball on that. We’re starting to have conversations with people in the Chicago region who may be interested,” the person said.
The New York Times first reported that Wyss exited the deal.
The Chicago Tribune has faced several staff cutbacks as Alden has gained influence over the company. The hedge fund owns 32% of Tribune Publishing. It first bought into the company in November 2019.
Alden could not be reached Saturday. Its president, Heath Freeman, has described himself as a rescuer of newspapers left for dead by owners who couldn’t adapt to technology or to shifts in advertising toward the internet and away from print.
The hedge fund’s business practices have drawn congressional scrutiny and led editorial staffs to organize with The NewsGuild-CWA labor union.
The Chicago Tribune Guild, representing the paper’s editorial staff, reacted to the news about Wyss on Twitter. “We are disappointed but remain hopeful that a civic-minded buyer will step forward to save our vital institution,” the group said. “It is crucial that we move into the future with an owner who believes in journalism that serves readers.”
Sources said they believe Bainum has three or four weeks to put together a new deal. Tribune Publishing’s board is still on record backing the Alden offer but it has not set a date for a shareholder vote.
Alden would be entitled to a $20 million breakup fee if Tribune Publishing sells to someone else. It also would make a substantial profit on its shares. It acquired many for $13 each.