As the day nears when Tribune Publishing officially renames itself lower-case tronc, another of the big shareholders has had enough. Oaktree Capital owns 4.69 million shares of Tribune stock, which is nearly 15 percent and used to be a more important slice of the pie until the company brought in Michael Ferro and later Patrick Soon-Shiong as major investors. In an SEC filing on Monday, Oaktree demanded to inspect Tribune Publishing's books and records "to determine whether the company's board of directors violated their fiduciary to shareholders when they sold a large stake of the company (5.2 million shares) to investor Michael Ferro at a below-market price, named Ferro the chairman of the board and rejected two acquisition offers from Gannett," Politico reports.
There already is a shareholder lawsuit against Tribune, by Shareholder Capital Structures Realty Advisors, and it came out recently that Ferro's selected board for the company did not receive strong shareholder backing when elected earlier this month. Separately, Politico's Ken Doctor recently reported that Gannett continues to hover around, hoping to acquire the Tribune newspapers if pressure builds on Ferro to sell.
More about Oaktree's move from the Wall Street Journal's story, Tribune Stockholder Oaktree Demands Investigation Into Leadership Shift:
In a letter addressed to Tribune’s General Counsel Julie Xanders, Oaktree asserted that “Mr. Ferro paid a below-market price for his stock in the company, rather than a premium reflecting his acquisition of control.”
Oaktree said it was seeking to “investigate possible mismanagement and other violations of duty by Michael Ferro and the company’s directors” in the sale of shares to Merrick Media, the appointment of Mr. Ferro and four associates to the board and the ruling out of a sale to Gannett.
Oaktree, which holds nearly 15% of Tribune shares, added that the results of its proposed investigation would help decide if any subsequent lawsuit would be filed.
Meanwhile, the tronc name change kicks in next week, and is still being roundly derided by Los Angeles Times staffers present and past. USC assistant professor of clinical marketing Ira Kalb, in a blog post for the Huffington Post, analyzes the move and why corporations change their names. He's not optimistic that it will do anything positive for Tribune Publishing.
While time will tell if the Tribune name change to tronc is successful, based on the criteria provided in this article, it is not likely that it will be....
I wish Tribune company the best of luck. Based on what I see now, they are going to need it.
Ferro said recently on CNBC that the "artificial intelligence" technology he has been promoting will help allow tronc to create and publish 2,000 videos a day. Not sure who would watch them all, but hey, that's his plan for the future LA Times.