UPDATE with Gannett’s response: For the second time, Los Angeles Times owner Tribune Publishing Company has rejected Gannett Company’s $15-per-share takeover bid. The door isn’t closed, however. Tribune, which also owns the Chicago Tribune and the Baltimore Sun, said Monday that it was open to further discussion.
In a statement, Tribune CEO Justin Dearborn called Gannett’s $864 million bid “inadequate,” adding that, “we remain unrelenting in our pursuit of value whether on a standalone basis or through a transaction, and believe the $70.5 million growth capital investment announced today from Nant Capital…will support Tribune’s transformation strategy.”
Dearborn was referring to a separate deal announced today with Nant Capital which will make a $70.5 million investment in exchange for stock. Nant will own 12.9% of Tribune’s outstanding shares, making it Tribune’s second-largest shareholder. Nant Capital founder Patrick Soon-Shiong is to join the Tribune board as vice chairman.
Gannett countered with a different take on the latest developments. “Despite repeated efforts by Gannett to engage with Tribune regarding its $15.00 per share all-cash premium offer, Tribune has continued to take actions that Gannett believes are designed to convey disproportionate control of the enterprise to select stockholders while ignoring its duties to all Tribune stockholders,” the USA Today owner said in a corporate statement. “Gannett notes that Tribune issued 4.7 million shares of common stock to a single investor, who will also be added to the Tribune Board, at the same price at which Gannett offered to purchase all outstanding Tribune common shares. This share issuance, when combined with the shares sold to an entity controlled by Tribune Chairman Michael Ferro, gives two members of the Tribune Board an ownership position of approximately 30 percent. Tribune again changed the composition of its board without stockholder participation; the newest appointee will not be subject to a stockholder vote for another year.
Dearborn said that Gannett’s own encumbrances, including $650 million in pension and other benefits liabilities, made it seem an unlikely candidate for takeover. But he said he continues to be open to closed-door discussions with Gannett to “assess whether there is a path forward.”
“Regardless of the outcome,” he continued, “we are confident that we have the right strategic plan in place to leverage technology and effectively monetize our world-class content.”