McCormick Media, an investor group that struck a deal earlier this month to acquire former Tronc Chairman Michael Ferro's entire stake in the company, may be looking to buy more of the Chicago-based newspaper chain.
In a filing with the Securities and Exchange Commission on Monday, McCormick Media investors said they agreed to buy Ferro's 25.7 percent stake in Tronc because it "represented an attractive investment opportunity" and they may increase or decrease their position in the company.
McCormick Media investors "are engaging in discussions with one or more significant stockholders" of Tronc to see if "such stockholders may desire to potentially engage in any such actions on a cooperative basis," the filing stated.
On April 13, McCormick Media agreed to buy Ferro's more than 9 million shares for $23 per share, or $208.6 million. That would give McCormick Media the largest stake in Tronc, which owns the Chicago Tribune, New York Daily News, Baltimore Sun and other major daily newspapers.
McCormick Media intends to finance the purchase of Ferro's shares through funding from an unnamed related entity, according to Monday's SEC filing.
The nascent company is headed by Sargent Collier, a distant relative of the family that built the Tribune media empire nearly a century ago.
Collier is the great-great-grandson of Leander McCormick who, with his brother, Cyrus, was a co-founder of International Harvester. A third brother, William, was the grandfather of Robert McCormick, the famous publisher of the Chicago Tribune.
"We want to make it the world's greatest newspaper again," Collier, 35, said in a brief interview with the Tribune last week, referencing the Tribune's longtime slogan.
Collier said he has been using McCormick as his last name professionally, but not exclusively, for several years. He signed the initial purchase agreement as McCormick, but changed it to McCormick-Collier in Monday's filing.
Michael Ferro sells stake in Chicago Tribune parent Tronc to McCormick Media for $208.6 million �
He is changing his last name to McCormick effective June 11, according to Monday's SEC filing.
Other named investors in McCormick Media include John Lynch, former chief executive of the San Diego Union-Tribune, and Clancy Woods, a longtime radio executive who once ran the Sporting News Radio Network.
Lynch, 71, started his media career as an advertising salesman for the Chicago Tribune and was a longtime radio executive in Chicago and elsewhere. He had a short-lived NFL career and is the father of John Lynch Jr., a notoriously hard-hitting safety with the Tampa Bay Buccaneers who was named general manager of the San Francisco 49ers last year.
In 2012, Lynch and his business partner at the Union-Tribune, San Diego real estate developer Doug Manchester, were reportedly interested in buying Tribune Co. (now Tribune Media). Instead, Tribune Publishing split from its broadcast parent and bought the Union-Tribune in 2015 for $85 million.
Woods, 61, held executive positions at some of the nation's largest radio chains, including CBS Radio, and ran the former Sporting News Radio Network, a Northbrook-based venture owned by Microsoft Corp. co-founder Paul Allen, which launched in 2001.
The Tribune was unable to reach Lynch or Woods for comment Tuesday.
McCormick Media's planned purchase of Ferro's Tronc shares is expected to close on or before May 15, allowing for a 30-day window for federal investigators to sign off on any antitrust concerns, a requirement based on the size of the transaction. If it does not close, McCormick Media has to pay Ferro a $1 million termination fee.
"If the ultimate parent of McCormick Media does not own any competitors of Tronc ... the deal likely will receive fairly rapid regulatory approval, perhaps even before the 30-day waiting period expires," said Dan Birk, an attorney at Chicago-based Eimer Stahl whose practice focuses on antitrust litigation. Birk is not involved in the transaction.
In February, Tronc's second-largest shareholder, biotech billionaire Patrick Soon-Shiong, agreed to buy the Union-Tribune and Los Angeles Times for $500 million in cash in a deal that received approval from federal regulators March 5, but has not been completed.
"We anticipate closing the deal," Tronc spokeswoman Marisa Kollias said in an email Tuesday.
Efforts to reach Soon-Shiong through a spokesman were unsuccessful Tuesday.
A technology entrepreneur who previously owned the Chicago Sun-Times, Ferro became the largest shareholder and nonexecutive chairman of Tribune Publishing in February 2016.
Ferro 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.
Collier, who grew up outside of Boston and now splits his time between Chicago and Palm Beach, is the author of a self-published book on the invention of the mechanical reaper by Virginia blacksmith Cyrus McCormick, which revolutionized farming and launched International Harvester.
He currently serves in business development for the family's Harvester Trust, and previously spent fours years as an associate at W. P. Carey, a New York-based real estate investment trust, according to his LinkedIn page.
While he wouldn't disclose plans for Tronc, Collier was enthusiastic about his family's imminent return to the newspaper business in his interview last week.
"We're very excited," he said. "It's great for Chicago, great for the paper and great for our family."
rchannick@chicagotribune.com
