This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Tribune Publishing Co., owner of the Los Angeles Times and Chicago Tribune, plunged the most ever after suspending its dividend and saying entrepreneur Michael Ferro became its non-executive chairman and largest shareholder with a $44.4 million investment.
Ferro bought 5.22 million newly issued shares, the company said Thursday. That's equal to a 16.6 percent stake, Tribune spokesman Matthew Hutchison said.
As part of the deal, he is replacing Eddy Hartenstein, a former Los Angeles Times publisher, as non-executive chairman, though Hartenstein will retain a board seat.
Tribune suspended its quarterly payout to free up cash for possible acquisitions and digital initiatives, according to the statement.
The struggling publisher, which said it ended 2015 with $41 million in cash, also reported some preliminary results for the year, saying revenue will be $1.66 billion to $1.67 billion, compared with the average of two analysts' estimates for 1.68 billion.
Tribune Publishing shares sank as much as 30 percent to $6.28, the biggest intraday drop since it was spun off from Tribune Co. in July 2014.
The company has paid a quarterly dividend of 17.5 cents a share since 2014. It will pay its previously declared fourth-quarter dividend on Feb. 11.
It has been a tumultuous time for the publisher. In September, Tribune fired Los Angeles Times Publisher Austin Beutner after little more than a year on the job, replacing him with Timothy Ryan, an executive from the Baltimore Sun.
Last summer, Eli Broad, a Los Angeles billionaire, made an overture to buy the newspaper and the San Diego Union-Tribune, according to a person with knowledge of the matter. Broad and Beutner had previously teamed up in a bid to buy the Times.
Tribune's newspaper unit was spun off from its TV business, now called Tribune Media Co. Last May, Tribune Publishing acquired the San Diego Union-Tribune and nine community weeklies and related digital properties.