The owner of the Los Angeles Times has bought out a major shareholder who had pushed for a sale, and also gave the company’s chairman, Michael Ferro, the ability to boost his ownership stake, it was reported Friday.
The moves heightens competition between the newspaper company’s two largest shareholders, Ferro and L.A. billionaire Dr. Patrick Soon-Shiong, the Los Angeles Times reported. Tronc Inc. owns The Times, the Chicago Tribune and other daily newspapers. Ferro and Soon-Shiong have been steadily buying up more shares of the company but had been limited to purchasing no more than 25 percent of outstanding shares.
In a regulatory filing Thursday, Chicago-based Tronc reported that it had paid $56.2 million — more than a quarter of the company’s year-end cash on hand — to acquire shares owned by Oaktree Capital Management, which had pushed the board to accept a $15-a-share offer from Gannett. The offer has been withdrawn. The price paid Oaktree represents a 14 percent premium over Thursday’s closing share price of $13.16.
In the same filing, the company said Ferro would be allowed to acquire as much as a 30 percent stake in the company. That change would allow Ferro to hold more shares than Soon-Shiong.
A spokesman for Soon-Shiong said Thursday that the L.A. physician and investor was caught off guard by Thursday痴 news and that he plans to petition the board to allow him to boost his stake, too, The Times reported. Soon-Shiong remains a board member until the company’s annual shareholder meeting in April.
“Dr. Soon-Shiong’s attorneys will be writing the company to request his contract also be amended to allow his stake to also be increased to 30 percent from 25 percent,” according to an emailed statement cited by The Times. “He believes all shareholders should be treated the same.”
There was no immediate response from Tronc.
