LA Times Owner Tribune Publishing Rejects Gannet’s Takeover Bid

“Tribune Publishing is in the early stages of a compelling transformation, ” CEO Justin Dearborn says

Last Updated: May 4, 2016 @ 2:38 PM

Tribune Publishing announced Wednesday that its board had unanimously rejected an $815 million acquisition offer from rival newspaper giant Gannett.

Tribune, which owns several daily newspapers including the Los Angeles Times and the Chicago Tribune, sent a letter to Gannett saying the offer “understates the Company’s true value and is not in the best interests of its shareholders.”

“Tribune Publishing is in the early stages of a compelling transformation, with a well-defined strategic plan to drive increasing monetization of our important brands, capitalize on the global potential of the LA Times and significantly accelerate our conversion of content to revenue through an enhanced digital strategy,” Tribune CEO Justin Dearborn said in his written rejection.

Gannett Co. publicly offered $815 million to purchase the company in an unsolicited takeover.

Top execs for the two companies have traded insults and Gannett announced Monday it intented to seek “withhold” votes in connection with Tribune’s 2016 Annual Meeting of Stockholders, which is set for June 2.

Oaktree Capital Group LLC, the Tribune’s second-largest shareholder, reportedly supported the sale, but not for that offered price, as the investment firm thought it can fetch more.

On Wednesday also reported a $6.5 million loss in advertising revenue for the first quarter of 2016, compared to a $2.5 million net profit for the same period a year ago.

Revenue was flat for the period ending March 27 at $398.2 million, compared to $398.3 million a year ago.