Gannett again rejects $1.3B hostile takeover bid

A hedge fund-owned newspaper company that sought to acquire Gannett Co. pitched a $1.8 billion deal funded exclusively with debt during a meeting with company officials last week – a move that Gannett said underscores its decision to reject the offer.

Representatives from MNG Enterprises Inc., also known as Digital First Media, met with Gannett privately on Thursday. MNG framed its offer as a transaction that would amount to “a merger or combination, not the acquisition proposal that MNG had previously put forth,” Gannett said in a news release Monday.

Since the proposed tie-up relied solely on new financing, the deal would inevitably lead to steep cost cuts to enable the combined company to pay off the new debt, said a person familiar with the talks who was not authorized to speak publicly on the matter.

The revelations mark the latest development in a high-stakes tug-of-war for control of Gannett, which owns the Milwaukee Journal Sentinel, USA TODAY, more than 100 local media brands and digital marketing assets such as ReachLocal and SweetIQ.

On Feb. 4, Gannett said its board had unanimously rejected MNG’s unsolicited bid to buy the company for $12 per share, saying it was not “credible.” A deal would include Gannett’s existing debt, which is about $338 million, according to S&P Global.

MNG followed up on Thursday by nominating six people with ties to MNG or its majority owner, Alden Global Capital, to Gannett’s board of directors. They included Alden President Heath Freeman, MNG Executive Chairman R. Joseph Fuchs and MNG Chief Operating Officer Guy Gilmore.

“We hope that Gannett and its advisors review our compelling offer and analysis shared today with the same sincerity that we demonstrated in today’s meeting,” MNG said Thursday in a statement.