Any inkling that Thursday’s Tribune Publishing Co. annual shareholders meeting might quell the tides of discontent between Tribune and Gannett Co. Inc. has been quashed as the public battle continues to play out.
Tribune shareholder Oaktree Capital sent a letter from its vice chairman John Frank to the Tribune board, calling for the formation of an independent committee to review a purchase offer from Gannett. “Your failure to do so thus far evidences gross disregard for your duties to shareholders,” Frank said in his letter.
Calls for an independent group to evaluate the Gannett offer were also made by Tribune shareholder Capital Structures Realty Advisors LLC, which filed a shareholder derivative lawsuit in the Delaware Court of Chancery this week alleging breach of fiduciary duty against Tribune’s board and Nant Capital LLC. Nant is one of Tribune’s largest shareholders and the firm that recently invested $70.5 million into the company in exchange for Tribune stock.
Frank and Oaktree’s position is if talks resumed between the two parties, there’s a possibility Gannett would increase it’s current offer of $864 million or $15 per share. The offer price is increased from an original $815 million, or $12.25 per share, made in April, when Gannett first began voicing its frustration with what it has seen as a lack of engagement on the part of Tribune.
“Lest there be any doubt, we would sell our shares at $15 per share — and believe that all shareholders should be afforded the opportunity to do so — if the only alternative is to rely on your continued leadership of the company,” Frank wrote in his letter.
Tribune said Thursday preliminary results from the day’s shareholder meeting showed support of the board nominees. Those early results were then criticized by Gannett, which argued 49 percent of shareholders withheld their support of the board, not counting votes affiliated with Tribune or Tribune chairman Michael Ferro. Tribune not surprisingly shot back calling Gannett’s statements a mischaracterization and reiterating a belief that “Gannett has shown no willingness to increase its bid to a compelling price level.”
Also on Thursday came news that Tribune Publishing would become Tronc Inc. — short for Tribune Online Content — effective June 20 when the company will switch from trading on the New York Stock Exchange to the Nasdaq Global Select Market.