Alden Global Capital increased its purchase offer by $1 per share in cash, according to a letter sent to the Dallas News Corporation board.
DALLAS — A week after the DallasNews Corporation board called a shareholder meeting to vote on a proposed merger with Hearst, competing bidder Alden Global Capital increased its buyout offer.
MNG, a subsidiary of Alden Global Capital, increased its offer to buy the DallasNews Corporation, the parent company of the Dallas Morning News, by $1. The increase brings Alden Global Capital’s total “non-binding” offer to $17.50 per share in cash, according to the letter, valuing the company at over $93.6 million.
The competing bidder, Hearst, which owns several other major Texas papers, offered to merge with the DallasNews Corporation in July for a price of $14 per share. After Alden Global Capital initially offered $16.50 per share, Hearst increased its offer to $15 per share.
In a letter to shareholders dated Aug. 4, the DallasNews Board called for a meeting and asked shareholders to approve the proposed merger with Hearst, calling it “the superior offer.”
“We are perplexed by your refusal to have a single discussion with us in the weeks since our original proposal was submitted,” MNG wrote in a letter to the board. “Our original proposal was clearly the best offer available to the shareholders to whom you owe a fiduciary duty (even in light of Hearst’s increased offer) and warranted good-faith engagement. Today, we are submitting this Enhanced Proposal to further demonstrate our commitment to a transaction between MNG and DallasNews.”
The DallasNews said in its letter to shareholders that Robert W. Decherd, who has a majority of the voting power of DallasNews common stock, has agreed to vote his shares in favor of the Hearst merger. Decherd previously stated that he will never agree to a buyout offer from Alden Global Capital, and the board argued that without Decherd’s approval, a buyout agreement could not be reached.
“Should Alden thwart the Hearst Merger, it will have succeeded only in destroying tens of millions of dollars of potential shareholder value represented by the Hearst Merger,” the DallasNews said in a press release.
Alden Global Capital said in its letter that Decherd’s opposition to the buyout does not prevent the board from engaging with the investment fund.
“We are putting more money on the table because we believe in the Dallas Morning News,” the letter states. “You should not summarily dismiss an offer that is clearly better for Dallas News’ shareholders and the readers of The Dallas Morning News alike.”
Alden has attracted controversy for focusing on cost-cutting at the newspapers it owns, according to the Dallas Business Journal. The Denver Post had a newsroom of more than 250 before Alden took over in 2011. By 2018, the newsroom had shrunk by nearly two-thirds to around 70, prompting the editorial board of the Post to publish a public rebuke of Alden, the Dallas Business Journal reported.
In a letter to the board, Alden said it is committed to maintaining the print edition of The Dallas Morning News and respects the newspaper’s service to the North Texas community.
“We welcome a discussion around the future operations of The Dallas Morning News in order to address Mr. Decherd’s concerns,” the letter states. “However, by not engaging with us, it is impossible for you to know whether that’s even possible, breaching any basic concept of a duty of care.”