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Gannett Bashes Tribune Publishing CEO in New Pitch to Shareholders

Memo calls new Tribune CEO Justin Dearborn ”an individual with no relevant industry experience“

Gannett has sent a memo to Tribune Publishing shareholders to renew its pitch for a takeover, complete with a timeline of everything that Gannett claimed has prevented stockholders from “realizing superior and certain cash value.”

The memo, issued on Tuesday, also mocked Tribune CEO Justin Dearborn, describing him as “an individual with no relevant industry experience.” Prior to joining Tribune in February, he served as CEO of Merge Healthcare.

Gannett’s new sales pitch highlighted every move Tribune has made since February and urged Tribune stockholders to “withhold” votes for all of the Tribune director nominees and to send a message to the Tribune board at the company’s annual meeting on Thursday.

Tribune Publishing rejected Gannett’s hostile takeover bid of $864 million, saying the offer is “not in the best interests of Tribune shareholders,” and the two companies have continued to jab each other through press releases.

Gannett upped its original unsolicited offer to purchase Tribune, whose assets include the Los Angeles Times, Chicago Tribune and Baltimore Sun. Tribune’s portfolio includes 11 major daily newspapers in nine major markets with total Sunday circulation of approximately 2.4 million copies.

Gannett owns USA Today and 92 local media organizations with a combined Sunday circulation of 3.9 million.

Investor Oaktree Capital Management, which owns roughly 15 percent of Tribune, sent a letter to the Tribune executives stating a strong desire to “engage Gannett immediately and seek to negotiate a transaction in the interest of all Tribune shareholders.” However, Oaktree has not supported a sale at $15 per share.

Tribune issued a statement in response to Gannett’s “repeated attempts to mislead Tribune shareholders and seize control of the Company.”

The statement says, “There are several important facts that Gannett continues to ignore in its desperate pursuit of Tribune,” before naming Oaktree rejecting Gannett’s latest offer, no evidence of “committed financing” from Gannett and Tribune inviting Gannett to a May 23 meeting that it skipped over a “customary nondisclosure agreement” as items “Gannett continues to ignore.”

Tribune’s statement concludes: “The Company is confident in its plan to leverage technology and effectively monetize its world class content and remains focused on taking the necessary steps to transform its business in response to the massive changes that have overtaken the publishing industry.”