Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Exclusive: Tribune Publishing to reject Gannett offer, will share info - sources

Published 05/23/2016, 12:55 AM
Updated 05/23/2016, 12:55 AM
© Reuters. People walk past the building of Los Angeles Times newspaper, which is owned by Tribune Publishing Co, in Los Angeles

© Reuters. People walk past the building of Los Angeles Times newspaper, which is owned by Tribune Publishing Co, in Los Angeles

By Greg Roumeliotis and Liana B. Baker

(Reuters) - Tribune Publishing Co (N:TPUB) has decided to reject Gannett Co (NYSE:TGNA) Inc's (N:GCI) latest $864 million takeover proposal, but will agree to share confidential information with the U.S. newspaper company, people familiar with the matter said on Sunday.

The move offers a path for Gannett, owner of USA Today, and Tribune Publishing, which owns a stable of newspapers including the Los Angeles Times and the Chicago Tribune, to engage in negotiations following a bitter dispute.

Last week, Gannett asked Tribune Publishing shareholders to withhold support for the latter's eight nominees to the board of directors at Tribune Publishing’s annual meeting on June 2.

While Tribune Publishing considers Gannett's $15 per share cash offer to be inadequate, it will offer Gannett access to some of its confidential corporate information under a non-disclosure agreement, the people said.

There is no certainty that Gannett will use this opportunity to table a higher offer, the people cautioned, asking not to be identified because the deliberations are confidential.

Tribune and Gannett representatives could not immediately be reached for comment.

Gannett's pursuit of Tribune has come at a challenging time for the newspaper industry, which is grappling with high costs, shrinking advertising dollars and a broad move toward digital content. Gannett is betting that bigger scale will bring it savings and help it generate more profit.

With Tribune Publishing now an acquisition target, it remains to be seen whether other companies in the sector, such as New Media Investment Group Inc (N:NEWM), News Corp (O:NWSA) and McClatchy Co (N:MNI), will show an interest.

Last month, Gannett made an unsolicited takeover offer for Tribune at $12.25 per share in cash, in a deal worth roughly $815 million. It followed up this month with a $15 per share offer for Tribune.

Oaktree Capital Group LLC (N:OAK), the second largest shareholder in Tribune Publishing, has urged the Chicago-based company to explore a sale and sent a letter to Tribune's board last week.

Proxy adviser Institutional Shareholder Services Inc (ISS)recommended that Tribune shareholders vote for the nominated directors.

The second largest U.S. newspaper chain by circulation, Digital First Media, publisher of the Denver Post and San Jose Mercury News, explored a sale last year before negotiations fell apart with buyout firm Apollo Global Management LLC (N:APO).

© Reuters. People walk past the building of Los Angeles Times newspaper, which is owned by Tribune Publishing Co, in Los Angeles

Billionaire Mort Zuckerman also tried to sell The New York Daily News last year, but then scrapped the plan after bids for the newspaper came in too low.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.