Tribune Publishing spurns Gannett offer, sells stake
Nant Capital edges Oaktree Capital as No. 2 shareholder
Tribune Publishing has rejected Gannett’s $15-pershare offer to buy the company, but opened the door to negotiations, the newspaper company announced Monday.
Tribune Publishing also announced it received a $70.5 million investment from Nant Capital in a deal that makes the Californiabased technology investment firm the company’s second-largest shareholder, edging past the 4.695 million shares owned by Oaktree Capital Management, which has pushed Tribune Publishing to negotiate a sale to Gannett.
Nant received 4.7 million newly issued shares at $15 a share, and company founder Dr. Patrick Soon-Shiong, a billionaire biotech entrepreneur, has been invited to join the Tribune Publishing board as vice chairman, beginning June 2. Nant’s acquisition gives it a 12.9 percent stake.
On Friday, Tribune Publishing Chairman Michael Ferro asked Oaktree to sell its stake for $15 a share to an “unidentified third party,” according to a letter Oaktree filed with the Securities and Exchange Commission. Oaktree said it rejected the offer.
Ferro owns 5.22 million shares of Tribune Publishing’s stock. With the issuance of new shares to Soon-Shiong, Ferro’s stake in Tribune Publishing falls to 14.4 percent. But the deal creates a 27.3 percent ownership block backing Ferro.
In a letter to employees Monday, Tribune Publishing CEO Justin Dearborn said the capital infusion will finance and accelerate the company’s “transformative” growth strategy.
On May 16, Gannett boosted its all-cash offer to acquire Tribune Publishing to $15 per share, from an unsolicited $12.25-a-share bid that was rejected.
The revised offer valued the owner of the Orlando Sentinel, Fort Lauderdale Sun Sentinel, Chicago Tribune, Los Angeles Times and other major newspapers at $864 million, including the assumption of $385 million in debt.
Ferro became Tribune Publishing’s largest shareholder in early February when his investment firm, Merrick Media, bought a 16.6 percent stake in a $44.4 million deal that priced the stock at $8.50 per share.
Tribune Publishing’s board opened the door to further discussions with a mutual nondisclosure agreement allowing Gannett access to financial information “to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated,” Dearborn said in the letter to employees.
Tribune Publishing’s nondisclosure agreement would require Gannett to “effectively cease” its proxy campaign asking Tribune Publishing shareholders to withhold support for directors or other public pursuit of a transaction, according to a Gannett statement Monday.
In its statement, Gannett said it would “review whether to proceed with its acquisition offer” after taking into account the results of its proxy campaign, the Tribune board’s response to its latest offer and “the latest Tribune actions.”