Updated with new Tribune comment: Gannett’s $400 million unsolicited buyout offer for Tribune Publishing (or $815 million including debt) isn’t formally up for a vote at the Los Angeles Times parent’s June 2 shareholder meeting. But Gannett is urging investors to do the next best thing: show their support for deal negotiations by withholding their vote for Tribune’s eight board of directors candidates.
Doing so would “send a clear message to the Tribune Board that its lack of engagement with our Board and management team regarding our highly compelling, premium offer for $12.25 per share in cash is unacceptable,” Gannett CEO Robert Dickey says this morning. “We remain ready to work constructively with the Tribune Board and management to negotiate a definitive merger agreement and quickly complete a transaction that would provide significant value to both companies’ stakeholders.”
Tribune calls the effort “a distraction from the real issue, which is whether the Gannett proposal is credible.” The company believes its directors, all running unopposed, “will earn the plurality of votes necessary to be elected.”
It chafes at assertion by the owner of USA Today that Tribune isn’t taking the offer seriously — which, if true, might represent a breach of its obligations to shareholders. That charge is “misleading and disingenuous,” Tribune says.
Its board has “engaged financial and legal advisors to review the Gannett proposal” and will announce its conclusions “as soon as feasible.”
After making its initial comment, Tribune added that Gannett “has no path to control for Tribune Publishing and their tactics clearly demonstrate a desperate and opportunistic attempt to steal the Company. This desperation indicates they have very limited strategic options for their own business and are attempting to exploit the current valuation” for Tribune — whose stock price had lost about half of its value in the year leading up to Gannett’s offer.
Tribune says that on its earnings call this Wednesday it will share “our strategy and the various possibilities for our business.”
Tribune investors are eager to see something happen. The company’s stock price is up more than 50% since just before Gannett disclosed its offer last week. In addition to the Los Angeles Times, Tribune owns the Chicago Tribune, Baltimore Sun, and The Hartford Courant.
Tribune CEO Justin Dearborn last week accused Gannett of “playing games,” engaging in “erratic and unreliable” behavior, and taking an “aggressive and hostile approach” with its bid.