Tribune Publishing shareholder Capital Structures Realty has sued the L.A. Times owner, accusing company executives of neglecting their fiduciary duties by rejecting takeover bid launched by Gannett.
Tribune Publishing chairman Michael Ferro is named in the complaint, filed late Wednesday in a Delaware court.
Capital Structures Realty seeks to undo a recent deal by Tribune Publishing to sell $70 million worth of stock to Nant Capital instead of pursuing a takeover bid from rival newspaper conglomerate Gannett, which owns USA Today.
The lawsuit is the latest development in the ongoing battle between Gannett and Tribune Publishing following Gannett’s unsolicited big to take over its rival newspaper company.
A Tribune Publishing spokesperson told Poynter the company has “received a copy of the complaint and is reviewing it carefully.”
Earlier this week, Gannett 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.
Tribune denied the timeline in a statement issued in response to Gannett’s “repeated attempts to mislead Tribune shareholders and seize control of the Company.”
Apparently, at least one prominent shareholder, Capital Structures Realty, agreed with Gannett’s memo. Tribune Publishing’s annual shareholders meeting is today and should be quite interesting.
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 to $15 per share, but that offer was also rejected. Tribune’s 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.
Pamela Chelin contributed to this report.