There was no public announcement, but regulatory filings indicate Alden Global Capital completed its $633 million purchase of Tribune Publishing late Monday, taking the Chicago-based newspaper chain private and adding the Chicago Tribune and other major dailies to the hedge fund’s growing portfolio.
Tribune Publishing CEO Terry Jimenez received $1.734 million in equity compensation, while three other non-Alden board members and the company’s interim chief financial officer also received payouts as a result of the merger, according to the beneficial ownership forms filed with the Securities and Exchange Commission.
On Tuesday morning, Tribune Publishing announced in an email to employees that there was an ownership change and that Jimenez was no longer with the company.
Neither Alden nor Tribune Publishing responded to requests for comment.
The $17.25-per-share buyout was approved last week by Tribune Publishing shareholders, with 81.28 percent of the shares not held by Alden voting in favor of the transaction, surpassing the required two-thirds threshold. Tribune Publishing, which trades on the Nasdaq Stock Market under the symbol TPCO, has been delisted as a result of the transaction, according to the SEC filings.
A New York-based hedge fund with a reputation as one of the industry’s most aggressive cost-cutters, Alden becomes the second-largest newspaper owner in the U.S. behind Gannett. Alden also owns MediaNews Group, whose larger newspapers include the Denver Post, San Jose (California) Mercury News and the St. Paul (Minnesota) Pioneer Press.
In addition to the Chicago Tribune, Tribune Publishing owns The Baltimore Sun; the Hartford (Connecticut) Courant; the Orlando (Florida) Sentinel; the South Florida Sun Sentinel; the New York Daily News; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.
Alden had been Tribune Publishing’s largest shareholder since November 2019, when it took a 32 percent stake, mostly through acquiring the holdings of former nonexecutive chairman Michael Ferro. The hedge fund bought a total of 11.5 million shares for $145.4 million, or about $12.64 per share, including the direct purchase of Ferro’s 9 million shares.
In February, Alden reached an agreement with the Tribune Publishing board to buy the rest of the company at $17.25 per share.
Jimenez, 49, who was elevated from chief financial officer to replace Tim Knight as CEO in February 2020, received $1.734 million from restricted stock units and options Monday, part of a $2.5 million golden parachute compensation package he was set to collect upon the closing of the merger and his exit from the company, according to regulatory filings.
In February, Jimenez was the sole dissenting vote to the Alden sale on the seven-member Tribune Publishing board. At the time, Jimenez said the price proposed by Alden “was inadequate,” and he considered “remaining as a stand-alone company in the best interests of the company and its stockholders,” according to an SEC filing.
While Alden’s $633 million offer is fully financed, the hedge fund can use Tribune Publishing’s cash on hand and reserved the right to have the newspaper chain take on up to $375 million in debt to close the deal, according to its equity commitment letter filed with the SEC.
Tribune Publishing is debt-free, profitable and has more than $250 million in cash.
Launched in 2007, Alden is headed by Randall D. Smith, 78, who made his fortune on Wall Street by investing in distressed companies. Smith holds one of three Alden seats on the seven-member Tribune board. Heath Freeman, 41, a Duke University graduate and the son of an investment banker who represented unions, is Alden’s president.