Chicago entrepreneur buys a large stake in L.A. Times' owner

LOS ANGELES -- Chicago entrepreneur Michael Ferro is investing $44.4 million in Los Angeles Times owner Tribune Publishing Co., making him the company's largest shareholder and infusing cash that could bolster a planned bid for the Orange County Register.

Ferro, through his firm Merrick Media, bought 5.22 million newly issued shares of Tribune Publishing stock, giving him a 16.6 percent stake in the company, which also owns the San Diego Union-Tribune, the Chicago Tribune and several other daily newspapers.

As part of the deal, he replaces Eddy Hartenstein, a

former Times publisher, as non-executive chairman of the Tribune Publishing board, the company said Thursday. Hartenstein will retain a board seat.

Shares of Tribune Publishing dropped sharply Thursday, falling by as much as 30 percent in early trading before recovering. Shares closed down $1.02, or 11 percent, to $7.98.

The influx of cash comes as Tribune Publishing, which has seen declining revenue amid difficulties in the newspaper industry, prepares to bid for the Orange County Register, Riverside Press-Enterprise and other assets of bankrupt publishing company Freedom Communications.

Last year, Tribune Publishing bought the San Diego Union-Tribune. Adding the Orange Country Register and Riverside Press-Enterprise to its portfolio would make Tribune Publishing the dominant newspaper group in Southern California.

Initial bids for Freedom's assets are due Feb. 12, and an attorney for Tribune Publishing said this week that the company is in "advanced stages" of putting together an offer. An auction is scheduled for next month.

This story was originally published February 4, 2016 at 11:27 PM with the headline "Chicago entrepreneur buys a large stake in L.A. Times' owner ."