The tension building between Tribune Publishing Co. and suitor Gannett Co. Inc. comes to a head today when Tribune shareholders meet for the company’s annual meeting.
Frustration from both parties related to Gannett’s now twice-failed attempts to buy Tribune has been bubbling over in the past few weeks and has also come to involve some of the companies’ largest shareholders, with the most recent action taken Wednesday when Tribune shareholder Capital Structures Realty Advisors LLC filed a lawsuit in the Delaware Court of Chancery against the Tribune board and one of its largest shareholders, Nant Capital LLC.
The complaint alleges breach of fiduciary duty by Tribune’s board.
Spokespersons for Gannett and Nant Capital could not be immediately reached for comment.
A statement from a Tribune spokeswoman said the company is reviewing the complaint and reiterated the value of the stock sales to Nant as well as an earlier investment made by Tribune chairman Michael Ferro’s Merrick Media as “valuable growth capital to allow the company to execute on its new value-creating business plan.”
Nant Capital and founder Patrick Soon-Shiong, who is set to join the Tribune board as vice chairman today, were also pulled into the lawsuit in hopes of reversing Nant’s $70.5 million capital investment in Tribune in a deal announced last month. The capital infusion came in exchange for 4.7 million shares of Tribune stock, giving Nant a 13 percent stake in the company. News of the Nant investment also came with a separate update that Tribune would not accept a revised offer from Gannett to acquire the company.
The shareholder suit now alleges the Nant deal was another way for Tribune to block Gannett’s attempts to buy the company.
The ugly battle now playing out as public spectacle between the two media companies came to the surface in April after Gannett became vocal about its initial bid of $815 million, which equates to $12.25 a share, for Tribune. The offer was rejected and then met with a revised bid of $864 million or $15 a share, which was again rejected.
Tribune continues to remain steadfast in its belief that the business, if given the time, will improve, specifically via assets such as the Los Angeles Times. It also pegs a higher valuation to itself than what the Gannett bid reflects.
The lawsuit asks a judge to stop the sale of shares to Nant and calls for a special committee to be formed to specifically review offers such as Gannett’s for the company.