Time is rapidly running out for hotel mogul Stewart Bainum to play white knight for the New York Daily News and other newspapers in the Tribune empire.
The special committee overseeing competing bids to buy the publisher have set May 21 as the date for shareholders to decide who will own the Chicago Tribune, the Baltimore Sun, the Orlando Sentinel and other Tribune papers.
Hedge fund Alden Global Capital’s $634 million offer is currently the only fully financed bid on the table.
Over the weekend, Bainum’s buyout partner, Swiss billionaire Hansjörg Wyss, announced he had pulled out of their $681 million, $18.50-a-share, proposed deal. That killed the deal as Wyss had been pledging $505 million of the proposed funding with Bainum only kicking in $100 million via their Newslight joint venture.
The special committee considering the takeover on Monday said that Newslight is no longer the superior bid and Tribune is “no longer negotiating” with it as a result.
Reports of the Bainum/Wyss breakup cited Wyss’s realization that turning the Chicago Tribune into a national platform would be too costly — reasoning that’s struck a false chord with some of the investors eyeing Tribune titles that were expected to be sold off if by Bainum/Wyss.
The blow comes even as fellow Tribune shareholder, Mason Slaine, said he would be willing to spend $100 million to support Bainum’s bid. The generous offer still leaves Newslight about $480 million short of the funds it needs to raise to become viable again.
To reach the necessary votes required to sell the Tribune to Alden shareholders, the hedge fund must still secure the vote of Dr. Patrick Soon-Shiong, the owner of the LA Times. Soon-Shiong holds about 24 percent of the stock of Tribune, which he bought for about $15 a share in 2015.
Soon-Shiong has not specifically endorsed the Alden bid, but has said in the past that he would embrace any proposal that is endorsed by the special committee. Right now, the only financed deal on the table is the Alden bid.
The imminent takeover by infamous cost-slashing hedge fund is likely to send a new round of panic through newsrooms. Most of the newsrooms are permanently remote as Tribune has already abolished newsrooms at the Daily News, Hartford Courant, the Orlando Sentinel, the Allentown Morning Call, and the Capital Gazette among others.
Even as time runs out, a source close to Bainum said the chairman of Choice Hotels chairman International is still scrambling to find strategic buyers as well as wealthy individuals and philanthropic groups. His aim was always to own the Baltimore Sun and peel off others to interested local buyers, the source said.