Swiss Billionaire Joins the Bidding for Tribune Publishing
The philanthropist Hansjorg Wyss has teamed with the Maryland hotel executive Stewart Bainum in a bid to upend Alden Global Capital’s plan to acquire the newspaper chain.,
An octogenarian Swiss billionaire who makes his home in Wyoming and has donated hundreds of millions to environmental causes is a surprise new player in the bidding for Tribune Publishing, the major newspaper chain that until recently seemed destined to end up in the hands of a New York hedge fund.
Hansjorg Wyss (pronounced Hans-yorg Vees), the former chief executive of the medical device manufacturer Synthes, said in an interview on Friday that he had agreed to join with the Maryland hotelier Stewart W. Bainum Jr. in a bid for Tribune Publishing, an offer that could upend Alden Global Capital’s plan to take full ownership of the company.
Mr. Wyss, who has given away some of his fortune to help preserve wildlife habitats in Wyoming, Montana and Maine, said he was motivated to join the Tribune bid by his belief in the need for a robust press. “I have an opportunity to do 500 times more than what I’m doing now,” he said.
Alden, which already owns roughly 32 percent of Tribune Publishing shares, is known for drastically cutting costs at the newspapers it controls through its MediaNews Group subsidiary. Last month, the hedge fund reached an agreement with Tribune, whose papers include The Daily News, The Baltimore Sun and The Chicago Tribune, to buy the rest of the company’s shares at $17.25 apiece.
Under that plan, Mr. Bainum, a lifelong Marylander, agreed to establish a nonprofit group that would buy The Sun and two other Tribune-owned Maryland newspapers from Alden for $65 million. Soon after that agreement was reached, however, negotiations between Mr. Bainum and Alden stalled. That prompted Mr. Bainum, the chairman of Choice Hotels International, one of the world’s largest hotel chains, to make a bid on March 16 for all of Tribune, beating Alden’s number with an offer of $18.50 a share.
That bid valued the company at about $650 million. The Alden agreement valued Tribune at roughly $630 million.
Tribune was not swayed by Mr. Bainum’s offer. A securities filing on Tuesday revealed that the company’s board recommended that shareholders approve the Alden bid. At the same time, the Tribune board gave Mr. Bainum the go-ahead to pursue financing for his higher bid.
He has done just that by teaming with Mr. Wyss, who said in the interview that he planned to own the company’s flagship paper while he and Mr. Bainum seek benefactors for Tribune’s seven other metro dailies, which include The Orlando Sentinel and The Hartford Courant.
“He made that bid because he wants The Baltimore Sun,” Mr. Wyss said, referring to Mr. Bainum. “I said, ‘Yeah, that’s fine. And I have to make The Tribune even better than what it is now.'”
The agreement struck by Mr. Wyss and Mr. Bainum is nonbinding, Mr. Wyss said. He added that it came together in recent days and is detailed in a letter he sent to Mr. Bainum on Friday. A person with knowledge of the discussions between Mr. Wyss and Mr. Bainum confirmed that each man planned to put up $100 million toward the $650 million bid, and Mr. Wyss said he would be willing to supply additional funds for debt financing.
Mr. Bainum declined to comment. A spokesman for three members of Tribune’s board not affiliated with Alden declined to comment. A spokesman for Alden did not immediately reply to a request for comment.
A decade ago, Mr. Wyss led the sale of Synthes to Johnson & Johnson for roughly $20 billion. Mr. Wyss and his family — a daughter, Amy, also lives in Wyoming — had the largest stake in Synthes, owning nearly half the shares.
The sale of Tribune, which the newspaper company hopes to conclude by July, requires regulatory approval and yes votes from company shareholders representing two-thirds of the non-Alden stock. The medical entrepreneur Patrick Soon-Shiong, who owns The Los Angeles Times with his wife, Michele B. Chan, has enough Tribune shares to squash the Alden deal by himself. Dr. Soon-Shiong declined to comment on Saturday.
Mr. Wyss said he would be a civic-minded custodian of The Chicago Tribune. “I don’t want to see another newspaper that has a chance to increase the amount of truth being told to the American people going down the drain,” he said.
Alden’s potential acquisition of Tribune has been fiercely opposed by many journalists at Tribune papers. Alden has aggressively cut costs at many MediaNews Group publications, including The Denver Post and The San Jose Mercury News. Critics say the hedge fund sacrifices journalistic quality for greater profits, while Alden argues that it saves papers that would otherwise join the thousands that have gone out of business in the last two decades.
Mr. Wyss, 85, said he was partly inspired to join Mr. Bainum by a New York Times opinion essay last year in which two Chicago Tribune reporters, David Jackson and Gary Marx, warned that an Alden purchase would lead to “a ghost version of The Chicago Tribune — a newspaper that can no longer carry out its essential watchdog mission.” Since that article appeared, both reporters have left the paper.
Mr. Wyss, born in Bern, first visited the United States as an exchange student in 1958, working for the Colorado Highway Department. He was a journalist as a young man, he said, covering skiing for Neue Zurcher Zeitung, a Zurich paper, and filing dispatches on American sports to Der Bund, a Bern paper, when he was studying at Harvard Business School.
He said he believed The Chicago Tribune would prosper under his ownership.
“Maybe I’m naive,” Mr. Wyss said, “but the combination of giving enough money to a professional staff to do the right things and putting quite a bit of money into digital will eventually make it a very profitable newspaper.”