#Opposition to Alden takeover of Tribune heats up ahead of vote

Opposition to hedge fund takeover of Tribune Publishing is bubbling up ahead of next week’s deal vote, including three legal fights, plans for multi-city rallies and written pleas for new buyers.

“Please buy this newspaper,” ran a May 5 headline in the New York Daily News.

“The stakes are clear,” wrote 14-year Daily News veteran Larry McShane in the adjoining story. “An Alden takeover is sure to mean a trail of laid-off journalists, contracted newsrooms, and shadow newspapers unable to cover local news and inform their communities.”

McShane, in an appearance on CNN’s “Reliable Sources” Sunday, said at least one wealthy individual contacted him, but he didn’t disclose their identity.

Adding to the drama, three shareholder lawsuits have been filed ahead of the May 21 vote to approve Alden Global Capital’s $631 million offer for Tribune Publishing, the newspaper giant behind nine daily newspapers, including the Chicago Tribune, the Hartford Courant and the Orlando Sentinel.

A special committee representing the four non-Alden board members has recommended shareholders accept the hedge fund’s $17.25-a-share offer valuing the company at $631 million.

But the lawsuits claim that Tribune “failed to disclose material information in connection with the merger and as a result, the definitive proxy statement is materially misleading.”

They also claim Tribune failed to explain how it derived the company’s earnings, making it impossible to judge the long-term value of the newspaper empire that includes nine metro dailies and smaller weekly publications.

Two of the suits were filed in Manhattan federal court by shareholders Elaine Wang and Alex Ciccotelli. A third was filed in Brooklyn federal court by Raymond Carlsen. All three suits are seeking a preliminary injunction to block the upcoming shareholder vote.

The company said in an SEC filing Wednesday that it believes the claims are “without merit.”

As that drama plays out, the News Guild is once again trying to muster the troops to make some noise over the buyout. The union, which represents journalists at all of Tribune’s papers except the South Florida Sun Sentinel, is calling for rallies on May 15 to oppose the bid and support a rival offer by hotel magnate Stewart Bainum.

“The proposed Alden deal is mostly financed by debt,” the national News Guild-CWA said in advance of the May 15 rallies now set for four cities. “And the hedge fund already infamous for gutting papers for spare parts has all but promised layoffs in the event of a takeover.”

But Bainum’s bid, valued at just over $680 million, remains underfunded, since nobody has stepped forward to put their hand up to buy the flagship Chicago Tribune in a post-buyout bust-up and sale to local owners.

Opposition is also coming from non-Tribune papers. Andy Grimm, a representative of the Chicago News Guild and a court reporter at the Chicago Sun-Times, penned an op-ed in the rival Chicago tabloid Wednesday titled, “Got Deep Pockets and Care About Chicago? Buy the Chicago Tribune.” But so far, no one has stepped forward.

Grimm said a Windy City rally is planned for 6 p.m. Saturday and will include “all the trade unions that work at the Chicago Tribune plus some local officials and people from the Sun Times. We’re fortunate to work in a two-newspaper city.”

Other Guild rallies are being planned by unions tied to the Baltimore Sun and the Capitol Gazette, the Virginian Pilot and Daily Press as well as the Hartford Courant.

Of course, the biggest threat to Alden rests with Dr. Patrick Soon-Shiong, owner of the Los Angeles Times who still holds 24 percent of Tribune stock even after buying the LA Times and San Diego Union Tribune from Tribune for $500 million in 2018.

In a wide-ranging interview with Bloomberg this week, Soon-Shiong called for government support for the embattled newspaper industry. He also said he has not determined how he will be vote next Friday, even though he stands to profit from a sale to Alden.

Soon-Shiong paid $15 a share for his stake. On the face of it, the money raised by a sale of his stake could be used to shore up the LA Times, which is now losing about $50 million a year.

His apparent lack of commitment to Alden’s $17.25-a-share bid has raised hope in some quarters. Alden is unable to vote its own 32 percent stake. For its bid to be accepted, it must secure approval by two-thirds of the other shareholders. Without Soon-Shiong on board, Alden cannot reach the two-thirds threshold.

CEO Terry Jimenez is already on record saying he will vote “no” because he believes Alden is submitting a lowball bid.

Still, Tribune’s stock on Thursday was trading as if it were a done deal and closed unchanged at $17.30. That’s slightly above Alden’s $17.25-a-share offer and below the $18-a-share bid Bainum is trying to assemble.