Tribune’s shares were trading at $13.85 before the opening bell on Monday, up 20.7 percent but far below the latest offer, which was set at a premium of 31 percent to Tribune’s Friday close.
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The increase raises the stakes after Tribune Publishing earlier this month rejected Gannett’s unsolicited bid to acquire the Chicago-based owner of the Chicago Tribune, Los Angeles Times and other major newspapers. At the time, Chief Executive Officer Justin Dearborn called Gannett’s offer a “low-ball price”.
“Our increased offer demonstrates our commitment to engaging in serious and meaningful negotiations with the Tribune Board to reach a mutually agreeable transaction where Gannett acquires all of Tribune”, John Jeffry Louis, Chairman of the Gannett Board of Directors, said.
On May 5, Tribune formally rejected Gannett’s original offer.
The news lifted Tribune shares more than 23% in pre-market trading, suggesting that investors believe something will happen.
The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally high debt management risk and generally disappointing historical performance in the stock itself. “We encourage Tribune’s shareholders to send a clear message to their Board to engage immediately with Gannett”.
The company also says Gannett is taking advantage of a dip in Tribune’s stock due to “the elimination of the dividend and disclosure of a material accounting weakness”.
Tribune Publishing Company (NYSE:TPUB) is a diversified media and marketing-solutions company that delivers innovative experiences for audiences and advertisers across all platforms.
Tribune Publishing said on May 4 the Gannett offer “understates the company’s true value and is not in the best interests of our shareholders”, and several days later adopted a shareholder rights plan or “poison pill” which makes a takeover more hard.
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“The time to act is now”, McLean, Virginia-based Gannett, publisher of USA Today, said in a statement Monday.
