Media: Hedge Fund Alden Gets Nod For Tribune Takeover
Shareholders of a major newspaper company in the US have voted in approval of a takeover by a hedge fund infamous for its practice of buying newspapers and implementing aggressive cost-cutting tactics to the detriment of journalistic operations.
- The company is the Tribune Publishing Company and the hedge fund is Alden Global Capital. Tribune owns a suite of newspapers including the Chicago Tribune, New York Daily News, and The Baltimore Sun
- Shareholders of Tribune, a public company, voted in approval of a proposed takeover by Alden Global, the company has announced. The approval stamp comes after months of deliberations and hurdles that included rival bids from a moneyed consortium.
- Alden Global had previously built up a 32% take in Tribune. The hedge fund needed majority approval for its takeover bid from Tribune’s remaining shareholders and just got that following a formal vote. Of the shareholders holding the remaining 68% stake in Tribune, 81% of them voted to approve Alden’s takeover, the company said.
- With the approval given, it appears that Alden Global no longer has many hurdles towards buying Tribune after a long fight to do so. The hedge fund saw fierce opposition after its buyout proposal, mainly from journalistic unions and Tribune’s current workers who pointed at its history of aggressive cost-cutting at its newspaper holdings to boost its own profits.
- Alden factually has a history of major cost-cutting by laying off staff at newspapers it owns. For that, it’s drawn a lot of ire from stakeholders in the media industry.
- Alden already owns roughly 100 newspapers and 200 publications, and its newspaper operations make up the third-largest newspaper chain (by circulation) in the US. If it absorbs Tribune, its newspaper operations will get even bigger at second-place.
- Concerns of Alden purchasing Tribune include the former saddling the latter with debt, as an official document submitted to the SEC by Alden notes its rights to seek outside debt financing for its proposed takeover. This is despite an earlier statement that it “can fully finance the Transaction with cash on hand”.
- Alden’s takeover values Tribune at $635mn. With approval, it’s expected to be completed in two days’ time on the 25th of May, 2021.
Update: A correction was made to indicate that Alden’s takeover deal values Tribune at $635mn, rather than the previously reported $630mn.