Will Tronc Vice Chairman Offer $18 a Share?

By Douglas A. McIntyre Updated Jan 12, 1:43PM EST · Published Mar 22, 10:31AM EDT

Will Tronc Vice Chairman Offer $18 a Share? — © Thinkstock

[cnxvideo id=”625498″ placement=”ros”]There is speculation by the Los Angeles edition of the American Business Journal that Tronc Inc. (NASDAQ: TRNC) Vice Chairman Patrick Soon-Shiong may make a bid for the entire company. In all probability, he would have to match the $18 or so price per share offered by Gannett Co. Inc. (NYSE: GCI) last year. Tronc currently trades near $13.80.

A bid of $18 would be a 33% increase over Tronc’s current share price. Many investors believe that Gannett’s offer was too high. However, Soon-Shiong is an individual who is not tied to a public company, and therefore the pressure of shareholders. According to Forbes, he has a net worth of over $8 billion.

In an article titled “Is Patrick Soon-Shiong Making a Play for Tronc?” the American Business Journal reports:

Just days after reports surfaced that he is being forced out as vice chairman of the tronc board, Patrick Soon-Shiong has increased his stake in the Chicago publishing company to 24 percent.

Already tronc’s second-biggest shareholder, the Los Angeles billionaire now owns within 1 percent of majority shareholder and Non-Executive Chairman Michael Ferro.

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A poison pill prevents either Ferro or Soon-Shiong from owning over 25% of the common shares. However, the board could vote to change that.

There are precedents for billionaire ownership of newspaper companies. Hedge fund manager John Henry paid $70 million in cash for the Boston Globe in 2013. Amazon.com Inc. (NASDAQ: AMZN) founder Jeff Bezos paid $250 million for the Washington Post in 2013. Minnesota businessman Glen Taylor bought the Minneapolis Star Tribune in 2014 for an undisclosed sum. In each of these cases, the buyers are considered more “trophy owners” than publishers previously in the newspaper business with plans to make huge profits.

Tronc would fetch at least $1 billion. Other than the premium at $18, the company has $380 million in debt. Soon-Shiong would not have to pay that much today, because of the stock he already owns.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.