Tribune Publishing's Top Investor Sells His Shares to Hedge Fund Alden Capital
Michael Ferro, the largest shareholder in Tribune Publishing Co., sold his 25% stake in the newspaper company for about $118 million to Alden Global Capital LLC, a hedge fund known for making deep cuts to newsrooms.
The 9.07 million shares were purchased from Ferro and his firm, Merrick Ventures, for $13 each, Tribune Publishing said Tuesday. Tribune is in talks with Alden to put two of its representatives on the board.
The sale caps a turbulent stretch for Tribune, owner of the Chicago Tribune and other big-city papers. The company has been beset by controversy since Ferro became its largest shareholder and took over as chairman in early 2016. He stepped down in March 2018 just as Fortune magazine was set to detail sexual-harassment accusations against him.
It was previously in talks to merge with McClatchy Co., though those discussions fizzled a year ago. Tribune also changed its name in 2016 to Tronc, a clumsy attempt to modernize the business that invited ridicule. It went back to Tribune Publishing last year.
Newspaper chains across the country are pondering their options as they lose readers and advertising. Even with mergers and reorganizations, the businesses have struggled to adapt to a world where Google and Facebook suck up billions in ad dollars. That's led to thousands of newsroom jobs getting eliminated.
"The Tribune Publishing board of directors looks forward to working with Alden to enhance our company's value as the company continues to provide valuable journalism for our customers and communities," Chairman David Dreier said in a statement.
Alden is the backer of MNG Enterprises Inc., which tried unsuccessfully to acquire Gannett Co. for $1.36 billion earlier this year. It also was rebuffed in its efforts to gain board seats at Gannett, owner of USA Today and the Arizona Republic.
Workers at Gannett were concerned that a MNG takeover would take a knife to its operations. MNG, owner of the Denver Post, St. Paul Pioneer Press and other daily newspapers, is known for heavy layoffs.
Gannett was ultimately acquired by New Media Investment Group Inc. -- a deal that closed Tuesday -- and that buyer has stressed that job cuts won't be severe.