Gannett Company Inc. has made good on its threats to solicit shareholders of Tribune Publishing Co., while alleging Tribune’s chairman supported the deal in a private meeting earlier this month.
The company refusing to back down from two offers to acquire the parent of the Los Angeles Times and Chicago Tribune, today sent letters to shareholders asking they cast “withhold” votes on all board nominees in the upcoming Tribune shareholders meeting scheduled for June 2.
Gannett, owner of USA Today, last month made an offer to buy Tribune for $815 million or $12.25 per share, but the deal was rejected by the Tribune board on the basis that the purchase price undervalued the company and there was still potential value to be had in the growth of franchises such as the Los Angeles Times. Gannett came back this week with a revised offer of $864 million or $15 a share.
Gannett’s letter to shareholders today alleges Tribune chairman Michael Ferro’s self-interest is at odds with what’s best for shareholders and said Ferro expressed possible support of a deal if promised a “significant role” at the merged company and became the “largest shareholder.” Reports have surfaced that Ferro himself is now mulling putting in a bid for Gannett of which the company said in a letter to its employees that it does not comment on rumors.
A spokesperson for Tribune could not be immediately reached for comment. A Gannett spokesman declined comment beyond its release today.
Meantime, outside pressure continues to build with Oaktree Capital Management, which has a 14.8 percent stake in Tribune Publishing, reiterating Thursday its push to have Tribune seriously consider a sale to Gannett. The Los Angeles firm said in a letter to the Tribune board that “we have not seen anything to give us confidence that Tribune on its own, with the resources and competitive position it has today, can achieve over any reasonable period of time the value for shareholders that we believe can likely be achieved through a transaction with Gannett. And we see very substantial risk that through pursuing an independent course, Tribune will destroy enormous shareholder value.”