Tribune Publishing Receives Bids from Three Suitors
Bloomberg reports Donerail Group, McClatchy Co. and AIM Media have submitted bids to acquire the company.
Tribune Publishing Co. (NYSE: TRCO), a Chicago-based media company, is entertaining bids from Donerail Group, McClatchy Co. and AIM Media, reports Bloomberg. Tribune, which recently reverted to its previous moniker from the Tronc brand, owns media businesses in eight markets. Among its titles are its namesake The Chicago Tribune, New York Daily News acquired in September 2017, The Baltimore Sun, Orlando Sentinel, South Florida’s Sun-Sentinel, The Virginian-Pilot, and the Hartford Courant, among others. The company also owns Tribune Content Agency, the Daily Meal and is majority owner of BestReviews.
Though Tribune wouldn’t comment on the bids, Bloomberg reports that buyers have been interested in the media company when the deal with Sinclair Broadcasting Group fell through this summer. Sinclair had hoped to buy Tribune Media for $3.9 billion, but the FCC was concerned about Sinclair’s intentions and transparency – or lack thereof. Tribune backed out of the deal and sued Sinclair for $1 billion for breach of contract in August.
In an August 9 news release, Tribune alleges that “Sinclair engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the Federal Communications Commission over regulatory requirements, refused to sell stations in the markets as required to obtain approval, and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay – all in derogation of Sinclair’s contractual obligations.”
Sinclair filed a countersuit, accusing the Tribune of trying to capitalize on the matter, reports Deadline Hollywood. Sinclair CEO Chris Ripley called the suit “entirely meritless.”
Bloomberg reports that the Tribune board will meet early this week to discuss the bids. Official representatives from the three suitors and Tribune Publishing Co. declined to comment for Bloomberg’s report.
In August, The Chicago Tribune reported that private equity firm Donerail was bidding to buy the company. Donerail Group is a new investment firm, lead by Will Wyatt, a former executive of Starboard Value LP. At that time, The Tribune reported a bid from a private equity firm – later named by Reuters – had bid between $19 to $20 per share. Wyatt has been involved in other Tribune/Tronc-related transactions, including serving as a paid consultant in the sale of the Los Angeles Times and San Diego Union-Tribune to billionaire Patrick Soon-Shiong.
Bloomberg says that McClatchy is offering stock as part of its bid package. Founded in 1857 in Sacramento, McClatchy has grown into a media company in 30 U.S. markets with assets in print, digital and mobile. Among its properties are The Fresno Bee, The Sacramento Bee, Miami Herald, Idaho Statesman and The Kansas City Star. If McClatchy is the winning bidder, McClatchy will have the opportunity to expand into new markets and perhaps find fiscal efficiencies by consolidating operations.
AIM Media owns consumer and trade events, websites, magazines, films and TV shows. Some of its brands include Clean Eating, Cabin Living, the Equine Network, Oxygen, Backpacker, Healthy Living Group, Yoga Journal and the Log & Timber University Online. It is not clear how acquiring Tribune would fit into AIM’s already-diverse portfolio of assets.
Last Monday, four days before bids were due, Tribune Publishing had a value of $14.46 per share. Since then, it has increased to $16.60, as of 4:01 p.m. EST on November 5. Depending on Tribune’s quarterly financials, this price is likely to change. A possible sale could give investors confidence that Tribune is a viable asset, but it is not clear how Tribune’s pending lawsuit could affect its value.
Tribune Publishing Co., formerly Tronc, formerly Tribune Media, has had a tumultuous couple of years with volatility in leadership as well as concerns about the company’s financial, branding and marketing decisions. Regardless of who owns the company, Tribune needs strong leadership and a clear direction in order for the assets currently owned by Tribune to survive and for investors to want to support.