Gannett Co. Inc. is not backing down from attempts to buy Tribune Publishing Co., reiterating its intent to initiate a proxy battle for the parent of the Chicago Tribune and Los Angeles Times.
Gannett, owner of USA Today, today expressed concern and puzzlement over Tribune’s rejection of an all-cash $815 million offer made last month after last week expressing publicly its frustrations with the lack of communication with Tribune. Both sides have since traded jabs in letters to one another filed with the Securities and Exchange Commission or publicly issued statements. Tribune cast Gannett’s behavior last week as “erratic and unreliable.”
“This announcement reaffirms our concern from the outset that Tribune’s board never intended to engage with us, necessitating that we make our proposal public,” Gannett chairman John Jeffry Louis said. “It is unfortunate that Tribune’s board would deny their shareholders this compelling, immediate and certain cash value by rejecting our offer without making a counterproposal or otherwise negotiating or providing any constructive feedback. Our requests for access to due diligence that may enable us to improve our proposal continue to be denied to the detriment of Tribune’s stockholders.”
Gannett criticized Tribune Publishing’s assertion that the offer, which equates to $12.25 per share, undervalues the company, calling out the company’s use of “inappropriate selections of public companies and transactions” to determine a trading multiple. Gannett also questioned the February sale of Tribune stock for $8.50 a share to chairman Michael Ferro as further evidence in support of its offer.
Gannett reiterated its intent to gain the support of Tribune shareholders by calling on them to cast withhold votes in the upcoming Tribune annual meeting.
Tribune today released results for its first quarter, which included revenue of $398 million, about unchanged from a year earlier. The company’s adjusted net income, excluding certain charges, rose 23 percent from the year-ago period to $6.6 million.
Tribune stock was trading up about 4 percent in after-hours trading to a market value of $348.9 million.
Gannett stock closed roughly flat today to a market capitalization of $1.9 billion.