Tribune shareholders approve hedge fund Alden's bid
Shareholders of Tribune Publishing, one of the country’s largest newspaper chains, approved a takeover bid by hedge fund Alden Global Capital on Friday
May 21, 2021, 11:41 PM
6 min read
Share to FacebookShare to TwitterEmail this articleFILE - In this Monday, April 25, 2016, file photo, Chicago Tribune and other newspapers are displayed at Chicago's O'Hare International Airport. Shareholders of Tribune Publishing, one of the country’s largest newspaper chains, will vote Friday, May 21, 2021, on whether to be acquired by a hedge fund that already owns one-third of the company and favors aggressive cost-cutting to boost profits. (AP Photo/Kiichiro Sato, File)
Shareholders of Tribune Publishing, one of the country’s largest newspaper chains, approved a $630 million takeover bid by hedge fund Alden Global Capital on Friday, the company said in a brief statement. Alden, which already owned nearly one-third of Tribune, stands to take full control of the Chicago Tribune, Baltimore Sun and other Tribune papers.
Through its Digital First Media chain, Alden owns the Boston Herald, Denver Post and San Jose Mercury News.
Tribune offered little additional detail beyond the fact that it expects the deal to close on May 25. In a statement, Alden said the move “reaffirms our commitment to the newspaper industry" and its focus on retooling publications so they can ”operate sustainably over the long term."
The Alden deal is just the latest major acquisition of a newspaper company by an investment firm dedicated to maximizing profits in distressed industries. The collapse of print advertising as readers migrated to digital publications has rocked the traditional newspaper business. Publishers have shut down more than 2,000 papers over the past 15 years and half of newsroom jobs have disappeared.
Investment firm owners are often criticized for valuing profits over the mission of local journalism, and Alden is no exception.
The deal drew opposition from many of the company’s journalists in an unusual spate of employee activism. They set up rallies, tried to find local buyers and begged for a rescue in their own newspapers. They had rooted for a higher bid from hotel mogul Stewart Bainum in the belief that it would be better for local journalism, although that never came to fruition. They lobbied Tribune's No. 2 investor, Los Angeles Times owner Patrick Soon-Shiong, to vote no and scuttle the deal.
In a blog post, the president of the union representing Tribune journalists lamented that Tribune's shareholders had “ let everyone down ” by approving the deal, but said the union would “continue to hold Alden Global Capital accountable.”
Confusion arose earlier in the day when a spokeswoman for Soon-Shiong said he “abstained” from the vote. According to Tribune’s April 20 proxy statement, which states that approval of the deal required the votes of at least two-thirds of shares not owned by Alden, an “abstain” vote counted the same as an “against” vote.
Neither Tribune nor its board made any public comments on vote result until late in the day Friday. In its statement, Tribune effectively confirmed earlier reporting attributed to unnamed Tribune officials that Soon-Shiong’s ballots were submitted without the “abstain” box checked, and so were counted as “yes” votes toward the Alden takeover in accordance with the instructions on the ballot. Tribune did not name Soon-Shiong directly, but said that proxies from “one of the company's largest shareholders” were submitted in this fashion.
Soon-Shiong's representative, Hillary Manning, said the billionaire viewed Tribune as a “passive investment” and that he is focused on the “revitalization” of the L.A. Times and the San Diego Union-Tribune, which he bought from Tribune in 2018. Soon-Shiong stands to gain about $150 million from his Tribune stake.
Legal experts agreed that if Soon-Shiong left his ballot blank, he likely did so deliberately.
