Michael Ferro sells stake in Times parent Tronc to McCormick family for $208.6 million
Michael Ferro, who resigned last month as chairman of Chicago-based newspaper chain Tronc, has struck a deal to sell his entire stake in the company, according to a filing with the Securities and Exchange Commission late Friday.
Ferro, who owned more than 25% of Tronc, the parent of the Los Angeles Times, Chicago Tribune and other newspapers, agreed to sell his more than 9 million shares at $23 per share, or $208.6 million, to McCormick Media, pending approval by regulators. Ferro owned the shares personally and through his Merrick Media and Merrick Venture Management entities. Tronc shares closed public trading at $17.15 on Friday.
The buyer, related to the McCormick family that controlled the Chicago Tribune throughout much of its history, approached Ferro within the last couple of weeks with the offer, according to a source familiar with the deal.
Sargent McCormick is listed in the SEC filing as the manager of McCormick Media.
Efforts to reach McCormick were not immediately successful.
Ferro, a technology entrepreneur who previously owned the Chicago Sun-Times, became the largest shareholder and nonexecutive chairman of Tribune Publishing in February 2016 when he spent $44.4 million, or $8.50 a share, for 5.22 million shares in the company. The corporate name was changed to Tronc shortly thereafter. In December 2016, he bought an additional 2.5 million shares at $15 a share for an additional $37.5 million.
It was a tumultuous run for Ferro. He stepped down from the board of Tronc in late March, just hours before Fortune published a story online accusing him of inappropriate sexual behavior toward two women while in his previous role as head of a Chicago investment firm.
In early January, the newsroom of The Times voted to form a union. A month later, Tronc announced plans to sell that paper and the San Diego Union-Tribune to Los Angeles biotech billionaire Dr. Patrick Soon-Shiong, Tronc’s second-largest shareholder, for $500 million in cash. Soon-Shiong holds a roughly 24.5% stake in Tronc, or about 8.7 million shares.
On Friday afternoon, Soon-Shiong said he was committed to holding on to his Tronc shares.
“Now that the McCormick family have taken over Ferro’s stock, over the course of the next couple of weeks we will try to understand what their vision is,” he said. “But I’m pleased because they have the same values as I do.”
This week, some staffers of the Chicago Tribune announced plans to unionize the newsroom in what would be a historic move at the 171-year-old newspaper.
In an emailed statement to employees, Tronc Chairman and Chief Executive Justin Dearborn noted that the company itself was not involved in the transaction. “I want to emphasize that this is a private transaction between Merrick and the buyer and does not alter our business strategy or the pending sale” of The Times and Union-Tribune, Dearborn wrote.
Channick writes for the Chicago Tribune.
5:45 p.m.: This article was updated with additional details on stock holdings and a statement from Tronc CEO Justin Dearborn.
4:55 p.m.: This article was updated with reaction from Dr. Patrick Soon-Shiong.
4:10 p.m.: This article was updated with additional share price data.
This article was originally published at 3:20 p.m.
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