Time running out for
Stewart Bainum’s bid as Tribune sets May 21 vote
Reports of the
Bainum/Wyss breakup cited Hansjörg Wyss's realization that
turning the Chicago Tribune into a national platform would be
rapidly running out for hotel mogul Stewart Bainum to play white
knight for the New York Daily News and other newspapers in the Tribune
committee overseeing competing bids to buy the publisher have set May 21 as
the date for shareholders to decide who will own the Chicago Tribune, the
Baltimore Sun, the Orlando Sentinel and other Tribune papers.
Hedge fund Alden
Global Capital’s $634
million offer is currently the only fully financed bid on the table.
Over the weekend,
Bainum’s buyout partner, Swiss billionaire Hansjörg Wyss, announced he had pulled
out of their $681 million, $18.50-a-share, proposed deal. That killed
the deal as Wyss had been pledging $505 million of the proposed funding with
Bainum only kicking in $100 million via their Newslight joint venture.
committee considering the takeover on Monday said that Newslight is no longer
the superior bid and Tribune is “no longer negotiating” with it as a result.
Reports of the
Bainum/Wyss breakup cited Wyss’s realization that turning the Chicago Tribune
into a national platform would be too costly — reasoning that’s struck a false
chord with some of the investors eyeing Tribune titles that were expected to be
sold off if by Bainum/Wyss.
The blow comes even
as fellow Tribune shareholder, Mason Slaine, said he would be willing to spend
$100 million to support Bainum’s bid. The generous offer still leaves Newslight
about $480 million short of the funds it needs to raise to become viable again.
To reach the
necessary votes required to sell the Tribune to Alden shareholders, the hedge
fund must still secure the vote of Dr.
Patrick Soon-Shiong, the owner of the LA Times. Soon-Shiong holds
about 24 percent of the stock of Tribune, which he bought for about $15 a share
Soon-Shiong has not
specifically endorsed the Alden bid, but has said in the past that he would
embrace any proposal that is endorsed by the special committee. Right now, the
only financed deal on the table is the Alden bid.
The imminent takeover by
infamous cost-slashing hedge fund
is likely to send a new round of panic
through newsrooms. Most of the newsrooms are permanently remote as Tribune has
already abolished newsrooms at the Daily News, Hartford Courant, the Orlando
Sentinel, the Allentown Morning Call, and the Capital Gazette among others.
Even as time runs
out, a source close to Bainum said the chairman of Choice Hotels chairman
International is still scrambling to find strategic buyers as well as wealthy
individuals and philanthropic groups. His aim was always to own the Baltimore
Sun and peel off others to interested local buyers, the source said.
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