MEDIA & MARKETING
Hotel Magnate Seeks Help to Save Tribune Publishing Bid After
Stewart Bainum remains committed to takeover effort of newspaper
group after Swiss billionaire Hansjörg Wyss drops out
Stewart Bainum, chairman of Choice Hotels International, at a
2012 event in Sun Valley, Idaho.
PHOTO: ANDREW GOMBERT/EPA/SHUTTERSTOCK
April 18, 2021 3:25 pm ET
A Maryland hotel
magnate behind an 11th-hour bid to acquire Tribune
Publishing Co. is
working to find new financing and partnership options after his
partner withdrew from the deal, people familiar with the matter said.
Swiss billionaire Hansjörg Wyss,
who had pledged to contribute over $500 million to the $680 million bid for the
newspaper company, had a change of heart after reviewing Tribune’s finances, the
Mr. Wyss’s decision dealt a blow
Hotels International Inc.
Chairman Stewart Bainum’s move to outbid hedge fund Alden Global Capital LLC,
the people said, though they said Mr. Bainum remains committed to finding ways
to move ahead with the bid.
Mason Slaine, a Florida investor
who had earlier offered $100 million for the bid, said in an interview Sunday
that he had been contacted by Mr. Bainum’s camp and that he remained interested
in possibly taking part.
A special committee set up by
Tribune’s board previously had recommended
shareholders accept Alden’s offer of $635 million, but had said it
would likely consider the competing $680 million bid led by Mr. Bainum to be
superior if Messrs. Bainum and Wyss stood by it following the due diligence
process and it remained fully financed. The departure of Mr. Wyss from the bid
throws that into question and increases the chance that Alden will emerge as the
winner without having to sweeten its offer.
The committee was sent formal
notice of Mr. Wyss’s decision on Saturday, people familiar with the matter said.
Mr. Bainum, a billionaire whose
company operates brands like Econo Lodge and Comfort Inn, had planned to commit
$100 million of his own money to the bid. He is satisfied with the due
diligence, some of the people said.
between Mr. Bainum and Alden to acquire Tribune—home to the Chicago
Tribune, Baltimore Sun, New York Daily News and other U.S. metro
newspapers—could help shape the future of local news in America, an industry
that is in steep decline. Alden has shown an appetite for acquisitions, betting
scale and efficiency are the path forward for struggling papers, but critics say
its aggressive cost-cutting is only accelerating the demise of local papers.
Another option is to sell to
ultrawealthy benefactors. That was the fate of the Washington Post, which sold
to Amazon.com Inc.
Bezos, as well as the Boston Globe and Minneapolis Star-Tribune.
Any buyer would be staring at a
grim financial picture for local papers. Over the past 20 years, annual
newspaper advertising revenue has plummeted by 70%, or $34 billion, according to
estimates by the Pew Research Center, as readers have moved online and digital
ad dollars have increasingly been spent on tech giants like Alphabet Inc.’s
Google and Facebook Inc. More
1,800 newspapers have closed since 2004,
according to research by the University of North Carolina.
If the effort by Messrs. Bainum
and Wyss had been successful, they planned to break up Tribune—with Mr. Bainum
keeping the Baltimore Sun and Mr. Wyss taking control of the Chicago Tribune.
The pair had envisioned selling the rest of Tribune’s seven properties to local
backers in each of the company’s markets like Florida, Pennsylvania and
Mr. Bainum has received interest
from buyers in various Tribune markets. Mr. Slaine, a technology investor from
Florida who holds a minority stake in Tribune, told The Wall Street Journal in
late March that he was willing to offer $100
million to support Mr. Bainum’s effort in return for the Orlando
Sentinel and Sun Sentinel in Fort Lauderdale. He wasn’t included in the initial
bidding group. On Sunday, Mr. Slaine said he had been contacted by Mr. Bainum’s
camp and that he remains interested in possibly joining the bid.
Mr. Bainum has said that if his
bid is successful, he intends to invest in the Baltimore paper and eventually
donate it to a nonprofit trust he would create, people familiar with the matter
have said. He originally had reached a side deal with Alden to acquire the Sun
for $65 million as part of the hedge fund’s takeover effort, but the arrangement
fell apart and Mr. Bainum moved to launch his own bid.
Mr. Wyss, who founded a medical-device
maker later bought by Johnson
& Johnson and has in recent years made substantial donations to
conservation efforts, had envisioned building the Chicago Tribune into a
national brand that would compete with the New York Times and Washington Post.
But he told Mr. Bainum that after reviewing the company’s finances it appeared
that that would be too difficult to accomplish, the people familiar with the
Write to Lukas I.
Alpert at firstname.lastname@example.org
in the April 19, 2021, print edition as 'Tribune Pursuer’s Partner Pulls Out Of
Bid for Chain.'