Tribune Publishing Co.’s poison pill is the latest move to stop Gannett Co. Inc. from a hostile takeover of the owner of the Los Angeles Times and Chicago Tribune.
Tribune today said it adopted a shareholder rights plan that would boost its share value two times for all stockholders except the acquiring entity upon an investor’s purchase of more than 20 percent of the stock. The plan is good for one year.
“Based on Gannett’s approach and continued hostility, the board is taking prudent measures to protect our shareholders’ best interests. The rights plan ensures shareholders receive fair treatment and protection in connection with any proposal to acquire Tribune Publishing and retain the opportunity to realize the value of their investment in the company,” said Tribune chief executive officer Justin Dearborn. “Our board is unanimous that Gannett will not succeed with its current tactics and low-ball price. Tribune stakeholders deserve better and we are confident that the steps we are taking will create better opportunities for future value than engaging with Gannett under the current circumstances.”
Gannett last month presented Tribune with an $815 million offer for the company, but its attempts didn’t go far, prompting the company to air its frustrations with Tribune publicly. Last week, Los Angeles investment firm and Tribune shareholder Oaktree Capital urged Tribune to hold talks with Gannett on a sale.
Gannett, in response to Tribune’s shareholder rights plan, said in a statement today: “It is unfortunate that instead of engaging with Gannett to negotiate a mutually agreeable transaction that is in the best interests of all Tribune stockholders, Tribune is putting up another roadblock to prevent its stockholders from realizing compelling, immediate and certain cash value for their investment. The decision to implement a poison pill is yet another demonstration that Tribune’s board and management team are not listening to its stockholders.”