Reports over the weekend that billionaire Hansjörg Wyss pulled out of a bid for Tribune Publishing are confirmed this morning. Wyss and Stewart Bainum had filed an alternative proposal to counter Alden Global Capital’s Tribune merger offer. Without the equity commintment of Wyss, Tribune’s Special Committee of their Board deems the Bainum-Wyss offer “no longer reasonably expected to lead to a “Superior Proposal.”
Choice Hotels Chairman Bainum informed the Special Committee of Wyss pulling out via an April 17 letter.
Special Committee of The Board of Directors
Tribune Publishing Company
160 N. Stetson Avenue
Chicago, IL 60601
Care of Eric Medow, Lazard LLCLadies and Gentlemen:
As a follow up to the discussions between our respective advisers on April 16, 2021, I write to provide the Special Committee directly an update on the non-binding proposal by Newslight, LLC (“Newslight”) to acquire Tribune Publishing Company (“Tribune”). On April 16,2021, Hansjörg Wyss informed me that he is no longer interested in participating in a potential acquisition of Tribune at the level of equity commitment indicated in Newslight’s letter to the Special Committee, dated April 1, 2021. Mr. Wyss further communicated to me that he remains interested in assisting in a potential transaction to make it successful.
I remain committed to pursuing a potential acquisition of Tribune for $18.50 in cash per share, including providing through one or more of my affiliates $100 million of the required equity financing to complete such acquisition. My intention is to continue to have discussions with other potential equity financing sources as permitted under the confidentiality agreements between Tribune and Newslight and Drill Down, LLC, respectively (collectively the “Confidentiality Agreements”), as well as other potential equity financing sources who have contacted me on an unsolicited basis (subject to the Special Committee approving discussions with such other potential equity financing sources in accordance with the Confidentiality Agreements).
My advisers have substantially completed the necessary due diligence of Tribune and there remain only a few issues to be negotiated in the definitive transaction documentation. I remain confident that there is significant interest in joining this effort and expect the necessary arrangements among one or more additional equity financing sources can be completed expeditiously.
If you have any questions, please do not hesitate to contact me or my advisers.
Sincerely,
Stewart Bainum, Jr.
With the Bainun-Wyss offer, via their Newslight entity, no longer reasonably able to lead to a “Superior Proposal”, things change. Tribune “is no longer permitted to engage in discussions and negotiations with, or provide diligence information to, Newslight and its principals in connection with their proposal and accordingly has terminated such discussions and negotiations with, and access to diligence information for, Newslight and its principals.”
The Newslight Offer and Plans for The Chicago Tribune
Newslight, the Bainum-Wyss entity, had offered to acquire all outstanding shares of Tribune stock for $18.50 per share in cash. While that was above Alden’s $17.25 per share, Tribune’s Special Committee of their Board still recommended the Alden Merger Proposal. Specifically, the Newslight proposal was nonbinding and assumed usage of $40 million more of Tribune cash than the Alden Merger Agreement. Also, the Special Committee pointed to questions about Wyss’ interest considering he only jumped in recently.
According to The New York Times, sources say Wyss decided to not pursue Tribune after examining the company’s finances in the past few days. Bainum and Wyss had entered a due diligence period to review this data. Even more interesting, the Times states that Wyss had envisioned turning Tribune’s flagship Chicago Tribune into a national publication.
Bainum states in his letter that he has other “potential equity financing sources” and is committed to pursuing Tribune with the $18.50 cash per share offer. However, Tribune appears to have moved on. They had already recommended the Alden Merger Proposal for several reasons even when Wyss was on board.
Potential U.S. Newspaper Powerhouse: Alden and Tribune
With the Newslight proposal potentially in the rear view, we can examine what a combined MediaNewsGroup and Tribune would look like.
Alden owns MediaNewsGroup, which operates 200 publications. Titles include the Denver Post, Mercury News, Orange County Register and Boston Herald.
Together, Tribune and Alden would control media properties in half of the top 10 markets in the United States. This includes the three biggest DMAs in the country, New York, Los Angeles and Chicago.
