Gannett Makes $815M Bid for Tribune Publishing

The offer represents a premium of 63% for Tribune shareholders and the publisher of the Los Angeles Times is giving it a "thorough review."
Katie Kuehner-HebertApril 25, 2016

Gannett Co. disclosed Monday it had offered to acquire Tribune Publishing for about $815 million but the owner of the Los Angeles Times and other large newspapers had reacted coolly to its overture.

At $12.25 per share, Gannett’s bid represents a premium of 63% to Tribune’s closing share price on Friday. The stock closed Monday at $11.50, up 53%, suggesting investors are optimistic the deal will go through.

“The Gannett board unanimously believes that the acquisition of Tribune would deliver substantial strategic and financial benefits for the combined company,” Gannett Chairman John Jeffry Louis said in a news release.

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But the company also released an email to Gannett in which it said it was disappointed in Gannett’s response to the offer, which was made April 12.

“Continuing to refuse to engage in a dialogue with us will only serve to delay the ability of your stockholders to receive the value represented by our all-cash offer,” the email said. “We therefore are prepared to consider all alternatives to complete this transaction.”

For its part, Tribune said Monday it was giving the proposal a “thorough review” with its advisers. “The board is committed to acting in the best interests of shareholders and will respond to Gannett as quickly as feasible,” the company wrote in a news release.

As The Wall Street Journal reports, “Gannett’s proposal comes amid a frenzy of newspaper industry deals, as bigger players scout for bargains to help give them the economic advantages of scale in a business under pressure on multiple fronts.”

Gannett, the owner of USA Today, already is the largest U.S. publisher, with 12% of newspaper daily circulation, according to the Alliance for Audited Media. In addition to the L.A. Times, Tribune owns the Chicago Tribune, the Baltimore Sun, and the Orlando Sentinel.

Besides the cost savings, the deal could enable Gannett to “extend its content strategy of making sections of USA Today part of the regional papers and coordinating investigative projects and other news through what it is calling the USA Today network,” the Poynter Institute said.

Gannett stock rose 6.5% to close at $16.79 on Monday. Tribune’s response to the takeover offer is “more of a maybe than a declaration of intent to fight,” Poynter said.