Hedge fund’s other new investments include troubled offshore oil firms
By Julie Reynolds
Alden Global Capital, the hedge fund currently attempting a hostile takeover of newspaper giant Gannett Co., is also quietly picking up shares of Tribune Publishing Co.
Alden is majority owner of the newspaper chain Digital First Media (now rebranded as MNG Enterprises), where it has become infamous for extreme layoffs and a “chop-shop” strategy of siphoning its own papers’ resources for short-term profits.
In the last quarter of 2018, Alden bought 55,000 shares of Tribune stock worth about $624,000, the hedge fund’s most recent Securities and Exchange Commission filing shows.
The investment is paltry compared to Alden’s purchase of 5.5 million shares of news giant Gannett, but it indicates Alden’s interest in continuing to exploit the volatile newspaper industry.
Alden valued its Gannett shares at nearly $47 million, the filing shows.
Since January, Alden has been attempting to take over Gannett, an acquisition that would presumably include billions of dollars’ worth of the chain’s real estate. Alden would likely sell off those assets through its subsidiary Twenty Lake Holdings, just as it did to nearly all of Digital First’s plants, buildings and land.
This month Alden nominated its own slate to run for Gannett’s board. Elections will take place at Gannett’s next annual shareholders’ meeting, most likely in early May. If successful, a takeover would make Digital First the largest newspaper chain in the country.
Alden last week again upheld its reputation as the most draconian cost-cutter in the industry by putting one editor in the impossible position of overseeing more than 50 dailies and weeklies across California.
Complicating matters further, Gannett is also in talks with Tribune about a possible merger, and now the McClatchy chain and Tribune are reportedly in merger talks.
According to Alden’s SEC form 13-F, Alden also is investing heavily in offshore oil firms, picking up 155,600 shares of Houston-based Diamond Offshore Drilling and 204,000 of Transocean Ltd.
Diamond was sued by employees in 2013 over their alleged exposure to asbestos-containing drilling mud. Diamond admitted their manufacturing drilling mud did contain asbestos at one time, but said the practice “had already ceased before we acquired any of the drilling rigs addressed in these lawsuits.”
It was Transocean’s rig that exploded during the 87-day-long Deepwater Horizon oil spill in 2010, and the firm has been plagued by accidents in recent years, a Wall Street Journal investigation found.
Other new investments for Alden include the purchase of 229,000 shares of Deutsche Bank and 262,000 shares of General Electric. It also bought 339,000 shares of struggling Texas-based oil producer Halcón Resources.
Alden’s past investments have included companies plagued by corruption and environmental scandals in Russia, Brazil and Angola.
Alden has also admitted it used $158 million of Digital First Media’s funds to invest in the Fred’s Pharmacy chain, quickly losing more than 80 percent of that investment’s value. It also controls the Payless ShoeSource chain, which appears poised to close all of its more than 2000 stores nationwide.