The struggle for control over the US print media group, whose papers include the Chicago Tribune and the LA Times, is becoming bizarre with a new player popping up: a Los Angeles-based billionaire. In fact, he is the 34th richest person in America and the wealthiest in Los Angles, according to Forbes magazine; a person who wants his own newspaper.
Patrick Soon-Shiong, a South African-born pharmaceuticals billionaire, has become the second-biggest shareholder in Tribune paying US$70.5 million for a 13% stake at US$15 a share (for 4.7 million shares), which is also the value of the latest offer from Gannett, America’s biggest newspaper owner. Soon-Shiong’s company, Nant Capital will become Tribune’s second-biggest shareholder and he will also join its board as vice-chairman, taking up the role from June 2 (Thursday week, when Tribune’s annual meeting will be held). Forbes says the doctor is worth US$11.8 billion, and all he wants is the LA Times.
That makes him an ally and supporter of Michael Ferro, Tribune’s chairman and biggest shareholder (he also owns the other big Chicago paper, the Sun Times). Ferro owns 5.22 million shares of Tribune Publishing (bought at US$8.50 a share). With the shares to issued to Soon-Shiong, Ferro’s stake in Tribune Publishing has been cut to 14.4%. But the deal effectively creates a 27.3% ownership block backing Ferro and blocking Gannett.
Soon-Shiong told the Financial Times his motivation for the investment was to “ensure the longevity of organisations such as the LA Times”. He plans to embrace virtual reality technology to create new revenue streams for Tribune’s publications, he added. “If you integrate big data, supercomputing and virtual reality with the skill sets of editors and writers, you could create a news network that is unprecedented,” Dr Soon-Shiong said. He is a surgeon and scientist and the FT says he became a billionaire when he invented a drug known as Abraxane, which he sold to US drugs giant, Celgene for US$2.9 billion in 2010. He also holds a 4.5% stake in the Los Angeles Lakers basketball team and has, in the past, bid for the Los Angeles Dodgers baseball team.
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