$680m Chicago Tribune deal collapses

Photo: AP

One of the long-planned and executed deals in the media business – the $680m takeover of the popular US Chicago Tribune chain collapsed as one of the partners in the buyer consortium pulled back, leaving the takeover unfinished in terms of secured funding, AP reported. Stewart Bainum, who is moving the transaction, now has to attract urgently new investors after the Swiss billionaire Hansjorg Wyss opted to drop off.

Wyss told Bainum that it would require too much investment to turn the chain’s flagship Chicago Tribune into a nationwide publication. Wyss and Bainum offered to buy the chain for $18.50 per share, topping a previous buyout offer of $17.25 per share, or $634 million, by Tribune’s largest shareholder, hedge fund Alden Global Capital. Bainum told Tribune representatives about Wyss withdrawal and they authorized him to talk to other potential investors, according to the person familiar with the matter.

Bainum was initially interested in buying one of Tribune’s papers, The Baltimore Sun, but is committed to acquiring the entire company. Tribune also owns the New York Daily News, the Hartford Courant and other newspapers.

Alden owns many newspapers through its MediaNews Group subsidiary, including the Boston Herald, the Denver Post and the San Jose Mercury News. Alden became Tribune Publishing’s largest shareholder in 2019 and now holds a 32% stake in the Chicago-based company. It plans to take Tribune private.

Wyss founded medical device maker Synthes USA, which he sold to Johnson & Johnson for about $20 billion in cash and stock in 2012. Forbes recently estimated his wealth at $6 billion.

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