Gannett Co. will no longer pursue an acquisition of Tronc, the company said on Tuesday morning.
Gannett, the parent company of USA Today, has been attempting to take over the parent company of the Los Angeles Times for months, but bankers recently backed out of the deal. Shares of Tronc dropped nearly 20 percent on Tuesday from Monday’s closing price.
Gannett started the negotiation by making an unsolicited offer that was rejected last April by Tronc, referred to then as Tribune Publishing. Things got ugly and Gannett even penned a letter to Tribune shareholders accusing the company’s leadership of “disregarding” their best interests.
At one point, Tronc chairman Michael Ferro told a group of Los Angeles Times staffers that he would purchase Gannett instead of accepting Gannett’s takeover offer.
In early August, the Wall Street Journal reported that Gannett increased its offer to purchase Tronc after unsolicited offers were rejected by Ferro. Gannett’s original offer of $12.25 a share was increased to $15 per share, but Tronc rejected both proposals.
Last week, Bloomberg reported that several lenders withdrew over concerns about the health of the two companies’ businesses at the finally agreed-upon price of $18.75 per share.
“It all comes down to making sure that these are accretive for our shareholders and add value and that the financing terms make sense for the company,” Gannett CEO Bob Dickey said on an earnings call last Thursday when asked about the takeover attempt. “We’re not going to add properties for the sake of adding properties.”
Tronc’s sizable portfolio includes The Chicago Tribune, The Los Angeles Times, The Orlando Sentinel, The Sun-Sentinel of South Florida, The Baltimore Sun, The Morning Call of Eastern Pennsylvania, The Hartford Courant and The San Diego Union-Tribune.