Tribune Publishing Co., the parent company of the Morning Call newspaper in Allentown is being acquired by New York-based Hedge Fund, Alden Global Capital.
Tribune announced late Tuesday that it entered into a definitive merger agreement under which Alden will acquire all of the outstanding shares of Tribune stock for $17.25 per share.
The hedge fund already owns 11.6 million shares of Tribune stock, or about 31.6% of the company’s outstanding shares.
This may not be good news for the call, which has already suffered newsroom cuts and is vacating its North Sixth Street headquarters.
The company has a reputation for making drastic cuts at local newspapers it acquires.
A recent article in Vanity Fair described Alden as a “hedge fund vampire that bleeds newspapers dry.”
Philip G. Franklin, chairman of the board and a member of the special committee on the acquisition commented on the move.
“Over the past year, the Company has taken a number of actions to adapt to an ever-changing business and industry environment, including the impact of COVID-19. These actions included strengthening the Company’s financial position, driving digital growth and investing in high-quality content to better serve customers, employees and communities. This positioning enabled the special committee to negotiate a premium, all-cash price, which the committee concluded was superior to the available alternatives.”
In a press release, the Tribune said that the purchase price represents a premium of 45% to the closing price of Tribune common stock on Dec. 11, 2020, the last trading day prior to receiving Alden’s proposal, and a 21% increase from Alden’s initial offer of $14.25 per share.
The agreement was approved by Tribune’s Board of Directors following the recommendation by the special committee of Tribune’s Board formed to evaluate Alden’s proposal and potential alternatives.
The transaction is expected to close in the second quarter of 2021.
Including the Morning Call operates local media businesses in eight markets. Other papers include the Chicago Tribune, New York Daily News and the Baltimore Sun.