An tacit ‘yes’ to an unwelcome takeover

May 24, 2021, 2:15 PM UTC

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Billionaire Patrick Soon-Shiong was viewed as something of a white knight when Tribune Publishing, the company behind titles such as the New York Daily News and the Chicago Tribune, sought to fend off a takeover from Gannett Co. in 2016.

Five years later, members of the Tribune Publishing union hoped he would come to their rescue again by blocking Alden Global Capital—a hedge fund infamous for cutting newsroom budgets and staff—from buying the business for $630 million and creating the second largest newspaper publisher by circulation.

But the white knight did not show up. On Friday, Soon-shiong, the second largest shareholder in Tribune, abstained from the vote. And in doing so, he tacitly approved the deal.

The union’s focus on Soon-Shiong was not unwarranted: The deal required two-thirds approval from non-Alden shareholders, giving Soon-Shiong—the inventor of a cancer drug— the ability to veto said deal. Alden already owned about 31% of the company.

But on Friday, Soon-Shiong had apparently failed to check any boxes—including the “abstain” box that would have counted as a “no” vote, thereby counting his vote as a “yes.” In a statement to Bloomberg, a spokeswoman for Soon-Shiong—who lives primarily in Los Angeles—said the investor had considered Tribune to be a passive investment and that he was focused on his and his family’s investments in the Los Angeles Times and San Diego Tribune. 

The day before the vote was tallied, the Washington Post released a story quoting the billionaire saying that he’d only just realized the Friday vote would decide the fate of the Tribune. Though he also perhaps offered hints of his thinking: “I was hoping that there [was] more than one buyer coming through the process,” he told the Post.

While Tribune had agreed to sell to Alden in February, another group led by Maryland hotel executive Stewart W. Bainum Jr. and Swiss billionaire Hansjörg Wyss expressed interest in buying the whole company for $680 million. But Wyss, who would have paid for the majority of the deal, later took himself off the table, leaving Bainum scrambling to find a new partner. The Friday vote effectively ends those efforts.

It’s expected Alden will begin cutting and consolidating operations at Tribune. The question now, though, is how Soon-Shiong (who invested about $70.5 million for a stake in Tribune now valued around $150 million) will manage the properties he says are less passive investments: the Los Angeles Times and San Diego Tribune. In February, the Wall Street Journal reported that Soon-Shiong was looking to sell the Times, which he had acquired for $500 million from Tribune Publishing in 2018. In a tweet and subsequent media appearances, though, Soon-Shiong has repeatedly emphasized plans to stay in the business: “WSJ article inaccurate. We are committed to the LATimes,” he tweeted in February.

Nevertheless, it’s a reminder that the news-media business has become a difficult one even as many billionaires swoop in for properties. Finding cures to cancer, it seems, may be an easier business than news media.

SNAP’S BIGGEST ACQUISITION: The social media company behind SnapChat, Snap, has acquired an augmented reality display company for over $500 million, the Verge first reported (and Term Sheet has confirmed). Roughly half of that will be paid in stock upon the closing of the deal, and the other half will be paid via either cash or stock in two years. The acquisition is perhaps the strongest sign yet of the company’s focus on AR-related eyewear—even if it is a far-afield bet that Snap CEO Evan Spiegel admits may not materialize for years.

Lucinda Shen
Twitter: @shenlucinda


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