Gannett Co Increases Offer to $15 Per Share to Acquire Tribune
Gannett Co, the owner of over 100 newspapers across the U.S. including the USA Today, said on Monday it increased its offer to acquire Tribune Publishing to $15 a share ratcheting up the pressure following its bid earlier that was rejected by the board of directors of Tribune despite certain shareholders calling for negotiations.
The new offer values the publishing company, which is the owner of the Chicago Tribune, Los Angeles Times as well as 9 other dailies, at approximately $479 million. The offer also includes assumption of close to $385 million in debt held by Tribune valuing the complete deal at close to $864 million.
The new offer was revised after Gannett representatives met with shareholders of Tribune. The increased offer is a premium of 99% to the closing price of Tribune stock as of April 22, the final trading day prior to Gannett revealing its intention to acquire the publishing company.
Tribune Publishing shares were up 27% in Monday’s premarket trading.
After reviewing more, we have more confidence in the ability to yield more operational improvements in the transactions announced Robert Dickey the CEO at Gannett in a letter to the board of Tribune.
The company also reiterated that it was confident antitrust clearance could be gained to complete the transaction.
Seeking to buy newspapers as well as affiliated properties of digital news in markets that Gannett is lacking presence, Dickey sent a private letter on April 12 that outlined his offer of all cash to Tribune CEO Justin Dearborn and the largest shareholder at Tribune Michael Ferro.
After not being able to enter formal negotiations, Gannett revealed its offer publicly April 25, forcing Tribune into hiring advisers to start reviewing its bid.
The board of Tribune voted unanimously on May 4 to reject the offer announcing that the company was poised to grow alone.
In an announcement of its earnings the same day, Tribune told investors as well that it was in the stages, albeit early, of a compelling transformation that was seeking more revenue through its digital platforms and by leveraging the brand the Los Angeles Times.
Tribune has created Tronc a new business unit that will aggregate its digital resources in-house and use widgets and software to gain a better profile of readers to give more relevant content and higher advertising rates on its digital platform.
Tribune also is planning to open another 7 foreign bureaus for its daily the Los Angeles Times.