Gannett presses acquisition target
It asks shareholders of Tribune Publishing to withhold support for board nominees.
Gannett is ramping up its efforts to acquire Tribune Publishing by going directly to shareholders, but not going so far as to initiate a hostile takeover bid for the publisher of the Los Angeles Times and Chicago Tribune.
In a f iling made with the Securities and Exchange Commission on Monday, Gannett asks shareholders of Tribune Publishing to withhold support for the slate of eight board nominees to be considered at Tribune Publishing’s annual meeting June 2 in Chicago. Withholding support for the slate would send a message to Tribune that shareholders want the company to engage in “good- faith negotiations” about its proposal made to acquire Tribune Publishing in an all- cash offer for $ 12.25 per share, Gannett said in the filing.
However, Gannett noted, Tribune Publishing’s slate of directors would still be elected even if shareholders vote to withhold support because the directors are elected by a plurality of the votes cast, and no alternative slate has been proposed by Gannett.
Tribune Publishing responded Monday by saying it was evaluating the purchase offer and said Gannett’s suggestion otherwise was “misleading and disingenuous.”
That offer, made public April 25, valued Tribune Publishing at $ 815 million, including the assumption of $ 390 million in debt. It was a 63% premium over the price of $ 7.52 a share April 22.
At the time, Gannett said it took its offer public after not receiving what it considered a prompt response from Tribune, and it charged the company was trying to “delay constructive engage- ment.” The chief executives of both companies traded accusations last week about the proposal, and in an interview with the Los Angeles Times, Tribune Publishing Chairman Michael Ferro charged Gannett with “trying to steal the company.”
Monday’s f iling by Gannett indicated that there had been little movement toward substantive dialogue. The company noted that it was not asking shareholders to vote on a sale and that its offer still required due diligence and a definite merger agreement.
“We believe a withhold vote on the company nominees would send a clear sig- nal that you, as a Tribune stockholder, want your board to engage in a meaningful dialogue with us regarding a possible business combination between our two companies,” Gannett said in its filing.
In a statement, Tribune said: “This latest ploy to encourage Tribune Publishing shareholders to withhold their votes at the 2016 annual meeting is a distraction from the real issue, which is whether the Gannett proposal is in the best interest of the Tribune shareholders.”