The Department of Justice is requiring the owner of Chicago Sun-Times to openly solicit bids from alternative buyers after the Wrapports informed antitrust enforcers that it planned to sell the paper to its local rival, Tronc (TRNC) , the owner of the Chicago Tribune.
Wrapports disclosed Monday that it planned to sell the Sun-Times to Tronc in 15 days if no other viable buyer expresses "substantial interest" in buying the paper, which can trace its roots to the founding of the Chicago Daily Journal in 1844.
No purchase price between Wrapports and Tronc has been disclosed.
Before announcing plans for the sale, Wrapports informed the DOJ's Antitrust Division that it is seeking a buyer that will continue to publish the newspaper and that it will sell to Tronc if no other viable buyers come forward. Typically antitrust enforcers would forbid the only two major daily newspapers serving a city from being owned by the same company but the newspaper industry is so under-pressure from Internet news sources today that few towns even have two major dailies anymore.
According to Wrapports, the Antitrust Division requested that an advertisement to announce the Sun-Times and other Wrapports' assets were for sale. Tuesday's full-page ad was required so other potential bidders that were not previously contacted might come forward.
Potential bidders expressing interest within the next 15 days must begin due diligence and indicate a price range they are willing to pay for the Chicago Sun-Times and demonstrate they have the financial ability to operate the paper.
Any viable buyers that come forward during the 15 days will be given "reasonable opportunity" to conduct additional due diligence and negotiate a potential purchase of the Sun-Times.
The Antitrust Division said it will closely monitor the sale process and the solicitation of interest from alternative parties. The DOJ encouraged potential buyers to not only contact Wrapports, but DOJ staff as well.
Tronc has provided the Chicago Sun-Times a non-binding letter of intent pledging to operate it as a separate unit and retaining its independent newsroom.
It may be that few if any alternative buyers come forward. Wrapports, which has owned the Sun-Times since 2012, said it began discussions with Tronc after approaching other media companies both locally and outside of Chicago. "After those efforts were exhausted, it became clear that a business combination with Tronc made the most sense, especially since Tronc and Wrapports already have some business ties," Wrapport said. "A combination of the companies helps keep the Sun-Times active as a separate voice."
The Chicago Tribune already handles all of the Sun-Times' printing and distribution.
"The investors and board members of Wrapports have been committed to keeping a strong media voice in Chicago alive. In a city like ours with multiple choices for news, success requires a national platform that can make significant digital investments across products and services. We believe an ownership that can bring substantial digital resources is necessary and is the best path for the Sun-Times long term." said John Canning, chairman of Wrapports.
"We look forward to operating the Sun-Times as a separate news unit, which means an independent Sun-Times will continue to produce the award winning journalism readers are accustomed to seeing online and print daily," said Jim Kirk, publisher and editor in chief of the Chicago Sun-Times. "The Chicago Sun-Times is an integral part of the fabric of the city and this path is an opportunity for the Sun-Times to thrive."
As Cisco (CSCO) - Get Report gears up to report fiscal-third-quarter results on Wednesday, Jim Cramer and the AAP team say they are interested to learn more about integration plans for recently announced acquisitions, as well as Cisco's plans for future capital deployment. Find out what they are telling their investment club members. Get a free trial subscription to Action Alerts PLUS.
Meanwhile, over on Real Money, Cramer shares his theory on why Under Armour's (UAA) - Get Report stock might not be rallying. Get his insights or analysis with a free trial subscription to Real Money.