Digital First Media makes bid for Commercial Appeal parent Gannett
Gannett Co., which owns the Memphis Commercial Appeal, USA TODAY and 108 other local media properties, has received an unsolicited proposal to acquire the company from media company MNG Enterprises, also known as Digital First Media.
Digital First Media is proposing to buy Gannett for $12 a share, which would be a 23 percent premium above Friday’s closing price of $9.75 a share. Digital First is majority owned by hedge fund Alden Global Capital.
“Consistent with its fiduciary duties and in consultation with its financial and legal advisers, the Gannett board of directors will carefully review the proposal received to determine the course of action that it believes is in the best interest of the company and Gannett shareholders,” the company said in a statement.
Gannett CEO Robert J. Dickey said in an email Monday morning to employees, “As promised, we will keep you informed as new information is available, but we are still business as usual.”
Digital First operates daily and weekly publications, including the Denver Post, the Los Angeles Daily News and the Boston Herald. Gannett’s media properties include USA TODAY, The Arizona Republic and The Detroit Free Press.
Digital First said in its letter to Gannett’s board that it holds a 7.5 percent ownership stake. “Frankly, the team leading Gannett has not demonstrated that it’s capable of effectively running this enterprise as a public company,” said the letter, signed by MNG Chairman Joseph Fuchs.
MNG proposes to Gannett that it enter into discussions about a “strategic combination,” hire an investment bank to study strategies, including a sale of the company, halt additional “digital acquisitions” and commit to a “feasible, strategic and financial path forward before hiring a new CEO.”
Dickey announced in December his plans to retire as Gannett CEO in May.
Gannett shares have fallen about 20 percent in the past 12 months, but shares rose 14 percent in early trading Monday to $11.
The Wall Street Journal, citing people familiar with the matter, reported late Sunday on the expected Digital First bid.
Attempts to reach representatives at Digital First and Alden Global Capital were unsuccessful.