A second firm is in talks to potentially acquire Chicago-based newspaper chain Tronc.
California-based newspaper chain McClatchy is in “early stage” discussions to buy Tronc, owner of the Chicago Tribune and other major newspapers, a source familiar with the negotiations said Friday.
McClatchy spokeswoman Jeanne Segal declined to confirm or deny the chain’s interest in Tronc. “We don’t comment on rumors or speculation,” she said Friday.
Tronc spokeswoman Marisa Kollias declined to comment.
McClatchy owns more than 30 newspapers in 14 states including the Miami Herald, the Kansas City Star, the Sacramento (Calif.) Bee, the Charlotte (N.C.) Observer, the News & Observer of Raleigh, N.C., and the Fort Worth (Texas) Star-Telegram. The publicly traded company generated about $904 million in revenue last year, according to filings with the Securities and Exchange Commission.
The Donerail Group, a nascent New York-based investment firm headed by former Starboard Value executive Will Wyatt, has been in negotiations to buy Tronc since early August. Sources familiar with negotiations say Donerail has offered between $19 and $20 per share for Tronc, valuing the newspaper company at upward of $700 million.
Wyatt declined to comment on the negotiations.
Tronc, formerly known as Tribune Publishing, also owns the Baltimore Sun, the Hartford Courant, the Orlando Sentinel, South Florida’s Sun Sentinel, the New York Daily News, the Capital Gazette in Annapolis, Md., the Morning Call of Allentown, Pa., the Daily Press in Newport News, Va., and the Virginian-Pilot in Norfolk, Va.
Wyatt, 34, served as a paid consultant in Tronc’s $500-million sale of the Los Angeles Times and San Diego Union-Tribune to biotech billionaire Patrick Soon-Shiong, which closed in June.
Soon-Shiong is Tronc’s second-largest shareholder with a nearly 25% stake.
In April, Tronc’s largest shareholder and its former chairman, Michael Ferro, struck a deal to sell his nearly 26% stake in Tronc for $208.6 million to McCormick Media, a newly formed company headed by a distant relative of the family that built the Tribune media empire nearly a century ago.
The deal, which priced Ferro’s more than 9 million shares of Tronc at $23 each, fell through in June for lack of funding.
Sargent McCormick, who headed McCormick Media’s failed bid for Ferro’s shares, said Thursday he was among those interested in pursuing ownership of the Chicago Tribune as part of Wyatt’s bid for Tronc.