Offer for Tribune puts pressure on Alden Global Capital

The chairman of a Maryland-based hotel chain and a Swiss billionaire have made headway with their offer to buy the owner of the Chicago Tribune and could force its would-be purchaser, Alden Global Capital, to increase or abandon its bid, two persons with knowledge of the negotiations said Sunday.

The sources said a special committee of Tribune Publishing’s board has been impressed with a $680 million offer from Stewart Bainum Jr. and Hansjörg Wyss. It valued Tribune Publishing, owner of the Chicago Tribune and eight other major newspapers, at $18.50 per share.

Talks could break down, but the offer appears to top Alden’s price of $17.25 per share, which valued the company at $630 million. Alden is a New York hedge fund that buys newspapers and wrings profits from them by selling their assets and slashing expenses, often by laying off reporters and editors. Its activities have contributed to “news deserts,” critics say, and spurred union organizing drives at the papers.

Alden already owns 32% of Tribune Publishing. The company’s board recommended its offer to shareholders in February, but it is free to consider a superior bid.

One source said Bainum and Wyss will fund their offer completely with equity, although debt or other partners may be found later. Their intent, both persons said, is to spin off Tribune Publishing’s papers to buyers who want to protect news coverage within a particular market.

“Board members wanted to know about the equity and the debt in the offer, and they were pleased with the answers they got,” one person said. Sources said representatives of Bainum and Wyss are getting access this week to a “data room” to examine all Tribune financials. A spokesman for Tribune Publishing declined to comment.

Wyss is said to be interested in the Chicago Tribune. Bainum, chairman of Choice Hotels International, wants the Baltimore Sun. Chicago-based Tribune Publishing’s other papers include the New York Daily News, Orlando Sentinel and Hartford Courant.

Sources said they will get up to two weeks to review Tribune books. They could revise or withdraw their offer, and Alden could respond as well. The hedge fund could not be reached Sunday.

The Wall Street Journal first reported the improved prospects for Bainum and Wyss on Sunday.

Wyss lives in Wyoming and has a longstanding interest in environmental causes. He was the chairman of Synthes, a medical device maker that he sold for $20.2 billion in 2012.

“He’s committed to investing in journalism” and wants to run the Chicago Tribune independently, a source said. He is said to have been moved by a published appeal in early 2020 from two staffers urging civic-minded purchasers to buy the company. Both reporters have since left the paper.

Alden would be entitled to a $20 million breakup fee if Tribune Publishing sells to someone else and would make a substantial profit on its shares.

The company’s shares last traded Thursday at $18.03, reflecting confidence that Alden’s $17.25 price won’t be the last word.