[Asia Economy Reporter Byunghee Park] The US media giant Tribune Publishing is being sold to a hedge fund.
The Tribune board has agreed to sell Tribune to the hedge fund Alden Global Capital, according to an AP report on the 16th (local time).
Alden plans to purchase Tribune shares at $17.25 per share, valuing Tribune at $630 million.
On the day, Tribune shares closed at $15.97, up 0.13% from the previous trading day. However, in after-hours trading, the stock surged 7.95% to close at $17.24.
Tribune stated that Alden proposed the acquisition in mid-December last year, and the agreed acquisition price this time is 45% higher than the stock price at that time. According to Tribune, the last trading day before Alden's acquisition proposal was December 11 last year. On December 11, 2023, Tribune's closing stock price was $11.90.
Tribune owns the Chicago Tribune, New York Daily News, Baltimore Sun, among others. The Baltimore Sun, one of Tribune's newspapers, is not included in this sale. The Baltimore Sun is set to be sold to a nonprofit organization founded by philanthropist Stuart Bynum Jr.
Alden already secured the position of Tribune's largest shareholder in 2019. Currently, Alden holds 32% of Tribune's shares.
Besides Tribune, Alden owns several major newspapers including the Boston Herald, Denver Post, and San Jose Mercury News. After acquiring these newspapers, Alden reduced costs by downsizing newsroom staff.
As a result, Tribune journalists are opposing this acquisition. The Tribune union has expressed its intention to find an alternative buyer to Alden.
How other major shareholders will respond to this merger is a variable factor.
In particular, the opinion of Patrick Soon-Shiong, a Chinese-American doctor who holds 24% of Tribune shares, could be a crucial factor. Soon-Shiong is the owner of the Los Angeles (LA) Times, the largest daily newspaper in the LA area. Mason Slane, former CEO of Thomson Financial, also holds 8% of Tribune shares.
AP attempted to contact Soon-Shiong and Slane but was unable to obtain their positions.
Due to digitalization and declining revenues, the US newspaper industry is shrinking. According to Pew Research, as of 2018, newspaper staff levels have decreased to half of what they were in 2004.
Last year, the spread of COVID-19 further exacerbated difficulties for newspapers. Tribune's Chief Financial Officer (CFO) announced in November last year, before Alden's acquisition proposal, that they would actively reduce costs through wage cuts, staff reductions, and unpaid leave.
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