A deal that would have resulted in a $630 million sale of Tribune Publishing Company (NASDAQ:TPCO) has reportedly hit a snag as a new prospective buyer has made his interest known in the company.
What Happened: According to a New York Times report sourced from three anonymous “people with knowledge of the matter,” the hedge fund Alden Global Capital planned to purchase all of the newspaper assets of Tribune Publishing and then sell the Baltimore Sun and two smaller Maryland newspapers for $65 million to a nonprofit controlled by Stewart W. Bainum Jr., the chairman of Choice Hotels International Inc (NYSE:CHH), a company with brands including Comfort Inn, Quality Inn and MainStay Suites.
Alden, which owns a 32% stake in Tribune Publishing, has been unable to reach a mutually satisfactory agreement with Bainum, who has reportedly decided to bypass the hedge fund and seek ownership of the publishing company directly. Two of the anonymous sources cited by the New York Times claim Bainum is prepared to put up $100 million for a bid and will seek additional financing from other investors.
Bainum has reportedly contacted the Tribune Publishing special committee, a group consisting of three independent board members, for permission to be released from a nondisclosure agreement prohibiting him from discussing the deal. With this permission, Bainum said he could pursue partners to support his new bid.
Why This Matters: Alden’s MediaNews Group subsidiary owns approximately 60 daily newspapers, including The Denver Post and The San Jose Mercury News. Alden has been trying to acquire full ownership of Tribune Publishing since 2019 and failed to reach a purchase agreement last year.
In addition to the Baltimore Sun, Tribune Publishing also owns the Chicago Tribune, New York Daily News, Hartford Courant and Orlando Sentinel. Tribune announced last month it ended 2020 holding $99 million in cash.
At last check, Tribune Publishing was trading at 17.58, up by 1.71%.
(Photo of Stewart W. Bainum Jr. courtesy Choice Hotels.)