Shares in Tronc Inc (NASDAQ:TRNC) soared on Wednesday morning after the US newspaper and publishing giant confirmed it is to sell the Los Angeles Times to billionaire investor Patrick Soon-Shiong for US$500mln in cash.
Speculation had been mounting overnight on Tuesday but Tronc officially confirmed the deal – which also includes The San Diego Tribune – this morning.
“This transaction allows us to fully repay our outstanding debt, significantly lower our pension liabilities and have a substantial cash position following the close of the transaction,” said chief executive Justin Dearborn.
The news is likely to be welcomed by staff at the LA Times, who have openly rebelled against the current owner, even pressuring Tronc into replacing its editor-in-chief, Lewis D’Vorkin.
The LA Times and San Diego Tribune are the latest papers to have been bought by the uber-rich, with Amazon boss Jeff Bezos snapping up the Washington Post in 2013 and Red Sox owner John Henry buying the Boston Globe in the same year.
Like the rest of the industry, the Times and Tribune have seen readership numbers and advertising revenues dwindle in recent years.
The Times has undergone several management changes and rounds of layoffs, reflecting a struggle by papers in general to adapt to digital media.
Tronc shares jumped 15.5% to US$20.91 early on Wednesday.