Tribune Publishing Rejects Gannett’s ‘Clearly Inadequate’ Takeover Offer

“The Gannett $15.00 per share proposal for all of Tribune is clearly inadequate,” the CEO says

Tribune Publishing has rejected Gannett’s revised takeover bid of $864 million, saying it’s  “not in the best interests of Tribune shareholders.”

Tribune did invite Gannett to agree to a mutual Non-Disclosure Agreement under which both parties could engage in due diligence and discussions to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated.

“The Gannett $15.00 per share proposal for all of Tribune is clearly inadequate as a control investment in Tribune and, as ISS has pointed out, our Board ‘has grounds to decline to engage’ on Gannett’s proposal,” Tribune CEO Justin Dearborn Said.

Gannett recently upped its unsolicited offer to purchase Tribune, which has assets that include the Los Angeles Times, Chicago Tribune and Baltimore Sun. It offered $864 million, or $15 per share, but Tribune chairman Michael Ferro reportedly countered by saying he’s flip it around and put in a bid for Gannett before rejecting the updated offer.

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 Sunday circulation of 3.9 million.

Investor Oaktree Capital Management, which owns roughly 15 percent of Tribune, sent a letter last week 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.”

“We continue to have serious doubts about Gannett’s ability to enter into a transaction – especially when you consider its approximate $650 million pension and OPEB liability – that makes sense for Tribune and its stakeholders, Dearborn Said. “However, we stand ready to work with Gannett to assess whether there is a path forward that will create more value for both sets of shareholders. We have no preconceived ideas about where these discussions might lead, but the Board is committed to engaging further in an effort to identify potential additional value for the Company’s shareholders.”