DallasNews Corp.’s board of directors has rejected the latest bid from Alden Global Capital of $18.50 per share in cash, and will adhere to its agreement with Hearst to sell the
firm and its main property, The Dallas Morning News, for $15 per share.
DallasNews entered into what it calls a definitive agreement in July to sell to Hearst
for $14 per share. That was raised to $15 after Alden’s company, MediaNews Group (MNG), made its initial offer.
That $15 per share represents a 242% premium over the
closing price per share of Series A common stock on July 9.
The DallasNews board reviewed the revised MNG offer with its legal and financial advisors and decided that it is not a superior
proposal.
Why would the board reject a $3.50- higher offer?
Robert W. Decherd -- who with his affiliates controls 50% of the combined voting power of the firm’s Series A and
Series B common stock, including 96% of the latter -- stated again that there is no scenario in which he will vote in favor of a sale to Alden or its affiliates.
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“Alden has a
controversial track record in the newspaper industry, with a well-documented history of cost-cutting, staff reductions, and reduced coverage of local communities,” a letter to DallasNews
shareholders stated.
In other words, a sale to Hearst would protect responsible journalism and a sound news product.
It looks on the surface like Alden may lose this one. If
nothing else, it has driven up the price for Hearst. And this contest must bring joy into the hearts of beleaguered newspaper publishers who wouldn’t mind being the subject of a bidding war.
Ironically, Alden was outbid when it was trying to buy Tribune Publishing, which includes such papers as The Chicago Tribune and New York Daily News, in 2021. But the Tribune
board approved Alden’s $633 million offer over the $680 proffered by Stewart Bainum and Hansjörg Wyss.
So now Alden is in the opposite position. We won’t know the
outcome until a DallasNews shareholder’s vote on Sept. 23.