Alden Global Bids To Take Control Of Tribune Publishing; Shares Jump 7%

Shares of Tribune Publishing surged more than 7% after its largest shareholder Alden Global Capital made an offer to take full control of the newspaper chain.

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According to an SEC filing on Dec. 31, Tribune Publishing’s (TBCO) board of directors on Dec. 14 received a non-binding proposal & inquiry letter from hedge fund Alden Global to buy the company at a price of $14.25 per share. The purchase price, which values Tribune Publishing at about $520.6 million, represents an 11% premium to the stock’s closing price on Wednesday of $12.79. Shares closed at $13.70 on Dec. 31. Tribune added that Alden did not propose any specific structure for the transaction.

The hedge fund took a 31.6% stake in Tribune Publishing in 2019, making it the publisher’s largest shareholder. Headquartered in Chicago, the publisher operates a number of media outlets, including The Chicago Tribune, The New York Daily News and The Baltimore Sun.

Following the proposal letter, Tribune announced that it has appointed a special committee of its board of directors to act on behalf of the company to deal with the acquisition proposal made by Alden Global. The special committee consists of three independent board members. The committee has hired Lazard as its financial advisor.

Separately, Tribune Publishing announced the closure of the sale of its majority stake in BestReviews to Nexstar Media Group for a gross purchase price of $160 million in cash, plus a working capital adjustment of $9.4 million. BestReviews was owned 60% by Tribune and 40% by its founders, BR Holding Company, Inc.

Noble Financial analyst Michael Kupinski on Dec. 17 put out a review on TBCO, rating the stock with a Buy rating and a price target of $17.50 (28% upside potential).

“We believe that upside revenue and cash flow surprises and increasing contributions from its Digital businesses would be among the key catalysts toward higher stock valuations,” Kupinski wrote in a note to investors. “We would not rule out, however, other transformative acquisitions or return of capital strategies.” (See TBCO stock analysis on TipRanks)

The analyst said that combined with the proceeds from the BestReviews sale and Tribune’s $121.3 million in cash as of September 30, the company would have $210 million in cash, or $5.75 per share.