As the battle to buy New York Daily News publisher Tribune Publishing heats up, the pressure is expected to mount for Dr. Patrick Soon-Shiong, the billionaire owner of the LA Times who holds the key to any sale thanks to his 24-percent stake in the Chicago company.
Tribune’s third-largest shareholder, Mason Slaine, who owns a stake of roughly 3.4 percent, has already said he plans to throw his lot in with a bid led by Stewart Bainum. The hotel mogul has submitted an $18.50 a share offer that values the publisher of the Chicago Tribune, the NY Daily News, the Baltimore Sun and six other daily papers at $680 million.
Heath Freeman’s hedge fund Alden Global Capital, by contrast, has offered $17.25 a share in a deal that values the company at $630 million. Unlike Slaine’s deal, the detail of which are still emerging, Alden’s offer has already been vetted and approved by Tribune’s board.
“I think Patrick will side with whichever offer will pay him the most money,” said a source familiar with Soon-Shiong, a biotech executive who bought the LA Times and a handful of other California papers from Tribune for $500 million in 2018.
But others think Soon-Shiong’s continued silence may be a sign that he has reservations about signing on to a deal to back Alden, a hedge fund that has gained a reputation as a “destroyer of local newspapers” due to the deep cuts it has made over the years to newspapers it controls via its MediaNews Group.
A spokeswoman for Soon-Shiong on Thursday said he had no comment on the latest battle for control of Tribune, which gets more heated by the day.
News broke over the weekend, for example, that swiss billionaire Hansjorg Wyss, who made his fortune by selling medical equipment maker Synthes to Johnson & Johnson for over $20 billion, would be teaming up with Bainum in his bid. Tribune shares jumped on the news to a Monday high of $18.13 a share, up from $17.25 on Friday.
Slaine, former co-owner of FT Media Holdings, then jumped into the fray on Tuesday, saying he would also be backing Bainum with the hope of buying two of Tribune’s Florida papers: the Orlando Sentinel and the South Florida Sun Sentinel.
Tribune shares closed Thursday at $18.03 a share.
Each of the billionaires have said they would be willing to invest $100 million of their money. In addition, New York investor and Shareholder Forum head Gary Lutin revealed that he is the mystery bidder seeking to buy the Allentown Morning Call for between $30 to $40 million.
To get its $17.25-a-share offer passed, Alden must secure two-thirds of the vote of the non-Alden shareholders. “Soon-Shiong essentially has a potential veto on the Alden deal,” said one source close to the special committee.
The special committee of outside directors who last month recommended that shareholders accept the Alden offer have so far not changed their recommendation. But that could change when the Bainum deal, which appears to be coming together still, is finalized.
Soon-Shiong, who bought into Tribune at around $11 a share, certainly appears to be in a winning spot. And his newspaper assets could certainly use the cash infusion, if he chooses to share the wealth.
At a virtual town hall on Thursday, which Soon-Shiong did not attend, Chris Argentieri, who oversees Soon-Shiong’s California Times newspaper business, revealed that the company suffered losses of north of $50 million in 2020. When Soon-Shiong bought the LA Times, San Diego Union-Tribune and some smaller weeklies for $500 million, sources said it was making $50 million a year.