Tribune said its board had rejected Gannett’s offer of per share, up from a previous offer of $12.25 and about double the closing price on April 22, the last trading day before Gannett revealed its first proposal.
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As reported here last September, Patrick Soon-Shiong – called the wealthiest person in Los Angeles by the L.A. Business Journal, and part owner of the Lakers – has always been rumored to have his eye on the Tribune-owned L.A. Times, and sister Union-Tribune, which survives only through an umbilical cord to the Times printing plant in Los Angeles. Nant will own 12.9% of Tribune’s outstanding shares, making it Tribune’s second-largest shareholder.
Gannett offered to acquire all of Tribune Publishing for $15.00 per share in cash.
With Tribune Publishing now an acquisition target, it remains to be seen whether other companies in the sector, such as New Media Investment Group Inc (NEWM.N), News Corp (NWSA.O) and McClatchy Co (MNI.N), will show an interest.
“We are committed to completely transforming Tribune Publishing and Dr. Soon-Shiong is a tremendous addition to those efforts”, Tribune Publishing CEO Justin Dearborn said in the investment announcement.
Tribune did invite Gannett to agree to a mutual Non-Disclosure Agreement under which both parties could engage in due diligence and discussions to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated.
“We declined to entertain such an offer, in significant part because we believe that a better price than $15 per share would be available if the Tribune Publishing Board would engage constructively with Gannett”, Frank said in the letter, which was also filed with the SEC.
Tribune and Gannett representatives could not immediately be reached for comment. He is the son of Chinese immigrants and was born in South Africa.
Tribune and controlling shareholder Michael Ferro, who has said repeatedly that Gannett is trying to “steal” the company, now has a white knight to help fend off its would-be acquirer.
Soon-Shiong received a $329.7 million pay package as NantKwest CEO in 2015, making him the highest-paid US executive a year ago, according to the Bloomberg Pay Index, a ranking of the top-paid executives at companies that trade on USA exchanges.
Soon-Shiong became a billionaire after selling two drug companies he founded.
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“All industries go through cycles and Tribune, recognizing the vital role of technology in the future of publishing, is transitioning from a legacy newspaper company to a technology and content company”, Soon-Shiong said. At the time, Ferro owned a sizeable stake in Tribune’s crosstown rival, the Chicago Sun-Times.
