“We encourage Tribune’s shareholders to send a clear message to their Board to engage immediately with Gannett regarding our revised all-cash, premium offer”, John Jeffry Louis, chairman of the Gannett board of directors, said in a statement.
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Shares of Tribune jumped 23 percent to $14.09 at 12:07 p.m.in NY and rose to $14.19 earlier, their highest level since August.
After Gannett initially made public its takeover offer, Tribune CEO Justin Dearborn in late April said in a letter to Gannett that the company’s behavior had been “erratic and unreliable”, and was “surprised and confused” by Gannett’s “aggressive and hostile” approach, according to an SEC filing. With debt included, the buyout could be worth around $864 million. Gannett said it believes its USA Today network offers a much better opportunity to revitalize Tribune than Tronc would.
Gannett said it revised its bid following an analysis of Tribune’s debt, cash balance and pension liabilities, which were reported on 5 May.
Tribune Publishing group was spun off the larger Tribune Co.in 2014, and has been examining options such as the sale of the coveted Los Angeles daily.
Robert Dickey, Gannett’s CEO, said that Tribune would be ill-advised to reject the new, better offer. Tribune’s revenue also dropped 2.1% past year to $1.67 billion. Ferro was later named as non-executive chairman of the newspaper publisher. Revenue remained flat at $398.2 million as print advertising sales continued to tumble. Earlier this month, the investment firm, which owns about 15% of Tribune, urged Tribune’s management to begin discussions with Gannett. The company has said the initial bid undervalued the company.
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Sensing growing pressure, Tribune Publishing has adopted a “shareholder rights plan”, known to investors as a poison pill, to thwart Gannett’s bid. At the same time Gannett has raised its offer, they continue to work to get shareholders to “Withhold” votes for the eight nominees to the Tribune Board at the shareholder meeting in June, hoping a new board will be more open to a sale.
