Billionaire shareholder activist Carl Icahn withdrew his proxy battle at Gannett and agreed to restrictions on his stock purchases after the company accepted several governance policies he supported, both sides announced this morning. The pact applies to the publishing company — which includes USA Today — that the newspaper, TV, and digital power plans to spin off this year. With the agreement, “shareholders will truly have a say in what happens at their company, including the ability to decide for themselves whether to accept an offer … if one is made,” Icahn says.
Icahn owns 6.6% of Gannett. He said in January that he would campaign at this year’s shareholder meeting to add two of his associates to the board and for resolutions that would force the company to consider a potential offer from a hostile bidder. The company charged that he was putting his agenda ahead of other shareholders.
In the new agreement, the publishing company — which will keep the Gannett name — will hold annual elections for the entire board. Shareholders who collectively own 20% of the shares can call a special meeting. If the board does adopt anti-takeover protections, they will expire after 135 days unless extended by owners of the majority of the shares. Directors who are unopposed at election time must win support from a majority of shareholders. And resolutions will pass with majority support, unless the law says that a supermajority is needed.
“Establishing an appropriate governance profile for the new publishing company has been a top priority for the Board as we prepare for the separation later this year,” Gannett non-executive Chairman Marge Magner says. The deal reflects “productive conversations we’ve had with Mr. Icahn and other shareholders, and are consistent with Gannett’s shareholder focus and track record of responsible corporate governance.”
Icahn calls the pact “another large step forward for good corporate governance.”