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Dec 31 (Reuters) - Tribune Publishing Co’s largest shareholder, Alden Global Capital, said on Thursday it had offered to take full control of the owner of the Chicago Tribune in a deal that values the company at $520.6 million.
Alden, known for its hostile takeover bids of publishing companies, has a 32% stake in Tribune.
The hedge fund’s offer valued the newspaper chain at $14.25 per share, representing a premium of 11.4% to the company’s shares last closing price.
Tribune designated a three-member committee of its board of directors to act on its behalf in respect of the offer Alden made on Dec. 14, it said late on Thursday, adding that it will not disclose developments unless the committee determines there is a need to.
The Wall Street Journal, which first reported on.wsj.com/3pDnoUh the potential deal, said the hedge fund grabbed a third seat on the Chicago Tribune publisher's board in July in exchange for an agreement to extend a standstill deal preventing Alden from increasing its stake or making a hostile bid for Tribune until after June 2021.
The newspaper chain, owner of the New York Daily News and the Baltimore Sun, has seen a decline in revenue this year as the COVID-19 pandemic hammers the publishing industry.
A study published last month found that print newspapers saw a decline in their overall consumer reach amid the health crisis.
Commercial news media are the hardest hit by the pandemic, especially those that are advertising-based, as well as newspapers and local media, according to the findings of the Reuters Institute for the Study of Journalism here, a research center at the University of Oxford that tracks media trends.
Shares of Tribune closed about 7% higher on Thursday.
Reporting by Ann Maria Shibu, Arghyadeep Dutta and Eva Mathews in Bengaluru; Additional reporting by Praveen Paramasivam; Editing by Anil D’Silva, Vinay Dwivedi, Aditya Soni and Uttaresh.V