Potential Sun-Times bidder drops out, others could challenge Tronc

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The offices of the Chicago Sun-Times at 350 N. Orleans. | Getty Images file photo

A suburban hedge fund manager who’d been considering submitting a bid to buy the Chicago Sun-Times dropped out of the running on Monday — and the status of other potential bids to buy the newspaper was unclear.

A 5 p.m. deadline to submit bids for the Sun-Times, the Chicago Reader and other media assets owned by Wrapports LLC came and went with Wrapports saying little about what had transpired.

The U.S. Department of Justice’s antitrust division — which is monitoring the sale — declined to comment altogether.

“We have received communication from multiple entities and we are in the process of discussing the correspondence with the Department of Justice,” Sun-Times Publisher and Editor in Chief Jim Kirk said in a statement. Kirk declined to comment further.

The Justice Department’s involvement stems from Tronc Inc., the parent company of the Chicago Tribune, coming forward with a “letter of intent” to buy the rival Sun-Times for undisclosed terms. Traditionally, the federal government has frowned upon a single entity controlling multiple media operations in the same market — concerns that both Tronc and Wrapports have tried to ease by saying the Tribune and Sun-Times would continue to operate as separate, independent voices should a deal go through.

At the Justice Department’s request, a 15 day-window for bids to be submitted for Wrapports’ assets was announced May 16 in an advertisement that ran in the Sun-Times. That deadline was extended four more days, until Monday.

As of Monday night’s deadline, it was unclear what communications between the company and potential bidders had occurred.

Thane Ritchie, head of the suburban hedge fund Ritchie Capital, had been weighing a bid for the Sun-Times and Reader, but a business associate of Ritchie’s said Monday afternoon that Ritchie had removed himself to make way for another bid being headed up by businessman Edwin Eisendrath, a former 43rd Ward alderman.

Stephen Denari, a mergers-and-acquisitions consultant who works with Ritchie, said that Ritchie stepped asidebecause, like Eisendrath, Ritchie planned to include investments from labor unions as part of his bid. The strategy too closely overlapped with Eisendrath’s, Denari said.

“We didn’t want to get in the way,” Denari said, noting that the two potential bid groups came together for a meeting on May 18 at the behest of the Chicago News Guild, the union representing Sun-Times and Reader newsroom employees.

Denari said the the national head of the News Guild, Bernie Lunzer, asked Ritchie to stand down. “Lunzer asked us to kind of stand down and let Ed and the CFL [Chicago Federation of Labor] take the ball,” Denari said.

David Roeder, a News Guild consultant, acknowledged the May 18 meeting occurred but was otherwise unaware of Ritchie’s decision to step aside.

Denari said Ritchie would still potentially be available to offer “funding and expertise” to Eisendrath and the CFL should they need it. “We’re sort of in standby mode,” Denari said.

In a statement Monday afternoon, CFL president Jorge Ramirez said it “is imperative for Chicago to continue to maintain two independent newspapers, ensuring diverse coverage of the stories that affect the Chicago region. . . . As the oldest, continuously published newspaper in Chicago, the Sun-Times has a reputation for in-depth, fact-based reporting. We hope that whoever the new owners may be, they are able to restore its legacy of serving the people of Chicago.”

Attempts to reach Eisendrath to see if a bid had been submitted were unsuccessful. Also unreachable were representatives for Neil Bluhm, whose family was interested in a potential Sun-Times bid, according to a Crain’s Chicago Business report.

A story from Politico Illinois columnist Natasha Korecki cited an unnamed source involved in the bid process as saying the Justice Department might not sign off on the highest bid. The Justice Department “is telling potential bidders there could be a scenario in which the highest bid doesn’t necessarily prevail,” Korecki reported.

Both Wrapports and Tronc have said that if a Wrapports-Tronc deal goes through, Chicago would remain a two-newspaper town.

Tronc — whose chairman is Chicago tech entrepreneur Michael Ferro Jr. — would own and operate the Sun-Times as a separate entity. The two companies are already closely linked, as the Sun-Times pays Tronc, short for Tribune Online Content, to print and distribute its print editions.

The News Guild has been opposed to a Tronc-Wrapports deal. The union has launched a “#NoNewsMonopoly” Facebook page and Twitter hashtag campaign.

Contributing: Mitchell Armentrout


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