Shares of Tribune Publishing Company rose ahead of the stock market’s opening Monday on a revised takeover offer from Gannett Company Inc.
Gannett today sent a new bid to the Tribune Board of Directors that raised its initial offer price from April of $12.25 a share to $15 for a total of $864 million. The offer, subject to due diligence, would also include about $385 million in debt.
Tribune’s stock rose about 23 percent in pre-market trading to $14.10 for a recent market value of $363.29 million on the news.
“Our increased offer demonstrates our commitment to engaging in serious and meaningful negotiations with the Tribune board to reach a mutually agreeable transaction where Gannett acquires all of Tribune,” said Gannett board chairman John Jeffry Louis. “It is evident from our discussions with Tribune shareholders that there is overwhelming support for the companies to engage immediately regarding our proposed transaction. By increasing our offer at this time, we are reaffirming Gannett’s belief that this transaction would deliver significant value to both companies’ stakeholders and that the time to act is now. We encourage Tribune’s shareholders to send a clear message to their board to engage immediately with Gannett regarding our revised all-cash, premium offer.”
Tribune has so far appeared uninterested in a merger with Gannett. The company’s board rejected the initial offer on the basis it undervalued the company and has reiterated sentiments shared with investors at its quarterly results release earlier this month that it still feels there is value to unlock in franchises such as The Los Angeles Times. Tribune also owns the Chicago Tribune and San Diego Union-Tribune.
Gannett, frustrated with what it has seen as a lack of any meaningful discussions on the offer price, has taken its cause public to voice its discontent with the negotiation process. The company has also more recently appealed to Tribune shareholders pushing for “withhold” votes on Tribune’s eight board nominees in the upcoming stockholder meeting June 2.