Commentary

Tribune Breakup Would Reverse Years Of Consolidation

Tribune Publishing is now weighing whether to accept a $680.8 million bid to take the company private in a deal that could determine the newspapers' eventual owner. It's possible that its papers will end up in the hands of multiple individual investors, reversing the longer-term trend of consolidation.

Last week, Tribune said it received a revised bid from a business entity named Newslight, which is backed by hotel magnate Stewart Bainum and Swiss billionaire Hansjorg Wyss. Their offer was about 7% higher than a bid by Alden Global Capital, the hedge fund that already owns about one-third of Tribune's stock and would see a tidy gain if Newslight's bid is accepted.

A winning bid by Newslight could set off a succession of deals to sell off Tribune's papers, which include the Chicago Tribune, New York Daily News and Baltimore Sun, to a variety of investors that have expressed in interest in owning a local media outlet.
Bainum is most interested in owning The Baltimore Sun, reflecting his deep ties to Maryland as chairman of Choice Hotels International, which is based in the state. Wyss is said to be most interested in the Chicago Tribune, though he lives in Wyoming and runs a conservation foundation there.
More potential investors have emerged to buy other Tribune-owned papers. A group of eight wealthy business leaders from Connecticut are discussing a plan to save the Hartford Courant, according to New York Post media reporter Keith Kelly. Considering that Connecticut is home to some of the world's biggest hedge funds, the Courant is likely to find plenty of suitors.
In addition, former investment banker Gary Lutin said he would offer $30 million-$40 million to buy the Morning Call, which serves Pennsylvania's Lehigh Valley. Lutin, who lives in Manhattan, would buy the paper even if it ends up in the hands of Alden, he said in an interview with the paper.
The Orlando Sentinel and Sun Sentinel in Florida also are drawing interest from investors. Mason Slaine, the former CEO of Thomson Financial who lives in South Florida, has said he wants to buy both papers, while Craig Mateer, founder and former owner of baggage-handling company Bags Inc., is interested in the Orlando Sentinel.

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That still leaves the New York Daily News without a potential suitor, unless grocery magnate John Catsimatidis enters the fray, several years after expressing interest in the storied tabloid. Tribune bought the paper four years ago from billionaire Mort Zuckerman for $1 and the assumption of $30 million in debt. A new buyer will certainly emerge if the price is right.
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