Tensions continue to bubble over in Gannett Co. Inc.’s now very public attempt to take over Tribune Publishing Co., parent of The Los Angeles Times and the Chicago Tribune, among other papers.
Gannett, the parent of USA Today, on Monday issued a public letter that revealed its frustration with what it called Tribune’s “continued refusal to begin constructive discussions with us” on an $815 million offer for the company. The deal also includes the assumption of $390 million in debt.
Tribune isn’t looking to sit idly by. The publishing company on Tuesday made public its response to Gannett in a filing with the Securities & Exchange Commission in which Tribune chief executive officer Justin C. Dearborn called Gannett’s behavior “erratic and unreliable” and also wrote, “While [Tribune] has been handling your unsolicited, nonbinding proposal with a constructive seriousness, Gannett has been playing games.”
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Dearborn argued the company engaged in multiple discussions with Gannett after an April 12 letter sent by Gannett and also made clear in an April 22 letter it had hired Goldman, Sachs & Co. and Lazard as financial advisers and Kirkland & Ellis LLP to advise on legal matters. That’s in addition to several discussions in writing and on the phone April 23 and April 24 between Dearborn and Gannett president and ceo Robert Dickey on “next steps,” according to Dearborn.
“Our entire team was surprised and confused by your decision to cease discussions regarding a reasonable path forward and to adopt the aggressive and hostile approach you have undertaken,” Dearborn said to Gannett.
Dickey fought back in a letter sent to Dearborn today writing, “It is not constructive to address the inaccuracies in your letter with respect to the events of the past few weeks and we won’t.” He then went on to take up Dearborn’s mention of Gannett canceling an April 18 dinner in Washington, D.C., two days prior for no reason, something that “can’t go without comment.” Dickey called the meeting a “social dinner” that would have been attended by someone at Tribune not privy to negotiations and pointed out that Gannett’s acquisition of Journal Media Group had just closed.
Although Dearborn said to Gannett that management at Tribune “disagree with your approach, it in no way changes our commitment to act in the best interest of shareholders.”
Gannett’s all-cash offer for Tribune equates to $12.25 a share. Tribune shares were up slightly to $11.56 in midday trading Tuesday, giving the company a market value of $366 million. Meantime, Gannett shares were off about 2.5 percent to $16.37 for a market value of $1.91 billion.