Proposal Provides Tribune Stockholders
Immediate and Certain Cash Value at a Significant Premium
Transaction to Enhance Leading National Media
Company’s Reach and Strengthen Regional and Local Brands
Combined Company to Have Unmatched Commitment
to Journalistic Excellence and Independence
Gannett Co., Inc. (NYSE:GCI) (“Gannett”) today announced a
proposal to acquire all of the outstanding shares of common stock
of Tribune Publishing Company (NYSE: TPUB) (“Tribune”) for $12.25
in cash per Tribune share. The total value of the proposal is
approximately $815 million, including the assumption of certain
Tribune liabilities, which include approximately $390 million of
debt outstanding as of December 31, 2015. Gannett’s all cash
proposal would provide Tribune stockholders a 63% premium to the
closing stock price of Tribune on April 22, 2016, a 58% premium to
the volume weighted average trading price over the past 90 days,
and a multiple of 5.6x Tribune’s estimated 2016 EBITDA, based on
consensus research estimates. The $12.25 per share offer price also
represents a significant premium to the $8.50 share price at which
Tribune recently issued common shares and provides immediate and
certain cash value to Tribune stockholders.
“The Gannett Board unanimously believes that the acquisition of
Tribune would deliver substantial strategic and financial benefits
for the combined company, and we are pleased to offer Tribune
stockholders a significant and compelling premium and immediate
cash value for their investment,” said John Jeffry Louis, Chairman
of the Gannett Board of Directors. “A combination with Tribune
would rapidly advance Gannett’s strategy to grow the USA TODAY
NETWORK, the largest local to national network of journalists in
the country, to include more local markets and new platforms, which
we believe will benefit readers and result in significant and
sustained value creation for Gannett stockholders.”
Robert J. Dickey, president and chief executive officer of
Gannett, said, “We believe Tribune shares the new Gannett’s
unwavering commitment to journalistic excellence and delivering
superior content on all platforms. In this respect, the proposed
combination of Gannett and Tribune would bring together two highly
complementary organizations with a shared goal of providing
trusted, premium content for the readers and communities we serve.
We are confident that a combined Gannett and Tribune would add
value for stakeholders of both companies as we work together to
foster deep and vital connections among the members of our
communities, provide excellent solutions for our business partners
and drive value for our stockholders.”
Mr. Dickey continued, “The combined company would also benefit
greatly from the combined experience and expertise of Tribune’s
talented employees and our own valued team members. The combined
organization would offer Tribune employees a broad range of
advancement opportunities within a larger organization with the
financial strength to meet the industry challenges we all face. We
are confident that as an even stronger organization, we would have
an enhanced ability to empower our employees to do their best work,
and maintain the same high journalistic standards and integrity for
which each organization is known.”
Gannett believes that there are compelling strategic and
financial benefits for a combination of the two companies,
including:
- Gannett’s $12.25 per share all-cash
proposal provides Tribune stockholders a significant premium and
immediate and certain value by eliminating the risk associated with
Tribune continuing to operate on a standalone basis in an
increasingly uncertain time for the industry.
- The proposed transaction is expected to
deliver substantial synergies of approximately $50 million
annually, subject to due diligence, that are anticipated to drive
compelling near- and long-term growth and value creation at the
combined company.
- As one company, Gannett and Tribune
would have the financial stability to continue maintaining
journalistic excellence, independence, high standards and integrity
for years to come.
- Gannett can quickly consummate a
transaction without any financing condition and has been advised
that the proposed combination will not impact the tax-free
treatment of Tribune’s recent spin-off transaction.
Below is the text of the letter that was sent on April 25, 2016
to Tribune’s Board of Directors:
April 25, 2016 VIA ELECTRONIC MAIL Mr.
Justin C. Dearborn, Chief Executive Officer & Director Tribune
Publishing Company 435 North Michigan Avenue Chicago, Illinois
60611
Re:
Tribune Publishing
Company
Dear Mr. Dearborn:
We are disappointed by the response we received from you in your
letter of April 22, 2016 regarding our proposal to acquire all of
the outstanding shares of Tribune Publishing Company (“Tribune”)
for an all-cash purchase price of $12.25 per share, and Tribune’s
continued refusal to begin constructive discussions with us. We
believe our proposal, which we first made in my letter to your
Board dated April 12, 2016 and reiterated in several phone
discussions with Michael Ferro and you since, is highly compelling
for Tribune’s stockholders and represents substantial value and
immediate liquidity for them.
I want to remind you that Gannett’s $12.25 per share offer price
represents a 63% premium to Friday’s closing stock price of
Tribune, a 58% premium to the volume weighted average trading price
over the past 90 days, and a multiple of 5.6x (including estimated
pension and post-retirement benefits payable) your 2016 EBITDA
estimate based on consensus research. The $12.25 per share offer
price also represents a significant premium to the $8.50 share
price at which Tribune recently issued common shares.
With our capability to commit to a deal without financing
contingencies, we believe that Gannett is uniquely positioned to
offer this level of premium to your stockholders and to quickly
evaluate and finalize this transaction, allowing your stockholders
to receive immediate and certain value.
As expressed previously, we believe the financial and strategic
logic of a combination of our two companies is clear. The
challenges for our industry in the digital age continue. Tribune
has itself faced numerous challenges and leadership changes over
the last few years. We believe Gannett is uniquely willing and able
to propel Tribune into the position of strength that will allow its
beloved and historic publications and other assets to survive and
thrive in this challenging environment. By combining, we would
create a company with the financial stability and flexibility
equipped to preserve journalistic integrity, high standards and
excellence for years to come. We would be able to both empower our
journalists and facilitate the creation of exceptional content
while delivering stockholder value.
Given the opportunity to benefit from the significant premium
and near-term liquidity, we are confident that Tribune’s
stockholders will embrace our offer. As we have indicated
previously, we would prefer to negotiate a transaction with
Tribune, but we have determined that making your stockholders aware
of our all-cash proposal is necessary, given Tribune’s attempts to
delay constructive engagement.
This matter is of the highest priority to us, and we continue to
be ready to dedicate significant resources to completing due
diligence and negotiating a transaction on an expedited basis. We
have been working closely with our financial advisors at Methuselah
Advisors and our legal advisors at Skadden, Arps, Slate, Meagher
& Flom LLP and have completed an extensive analysis of the
proposed transaction based on publicly available information. As
well, we are confident that the regulatory approvals necessary to
consummate the proposed transaction will be obtained.
This proposal, which is unanimously supported by our Board, is a
non-binding expression of our current views, which remains, among
other things, subject to satisfactory completion of due diligence,
the negotiation, execution and delivery of a mutually satisfactory
definitive merger agreement, approval of the definitive agreement
by your and our Boards of Directors, approval of the transaction by
your stockholders, and receipt of customary regulatory
approvals.
Given the substantial value represented by our offer and the
other compelling benefits of a combination of Gannett and Tribune,
we are confident that Tribune’s non-management stockholders will
support our proposal. Continuing to refuse to engage in a dialogue
with us will only serve to delay the ability of your stockholders
to receive the value represented by our all-cash offer. We
therefore are prepared to consider all alternatives to complete
this transaction. In the meantime, we remain eager to meet with you
and your team as soon as possible to progress the transaction.
Sincerely, GANNETT CO., INC.
/s/ Robert Dickey
Robert Dickey President and CEO cc: Board of
Directors, Tribune Publishing Company, c/o Julie K. Xanders,
Executive Vice President, General Counsel & Secretary
Methuselah Advisors is acting as the exclusive financial advisor
and Skadden, Arps, Slate, Meagher & Flom LLP is serving as
legal counsel.
ABOUT GANNETT
Gannett Co., Inc. (NYSE: GCI) is a new kind of media company
committed to strengthening communities across the nation. Through
trusted, compelling content and unmatched local-to-national reach,
the company touches the lives of more than 100 million people
monthly. With more than 120 markets internationally, it is known
for Pulitzer Prize-winning newsrooms, powerhouse brands such as USA
TODAY and specialized media properties. To connect with us, visit
www.gannett.com.
FORWARD LOOKING STATEMENTS
Certain statements in this press release may be forward looking
in nature or constitute “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995, including
statements regarding the proposed acquisition of Tribune by Gannett
and the benefits of the proposed acquisition. Forward-looking
statements include all statements that are not historical facts and
can typically be identified by words such as “believe,” “expect,”
“estimate,” “predict,” “target,” “potential,” “likely,” “continue,”
“ongoing,” “could,” “should,” “intend,” “may,” “might,” “plan,”
“seek,” “anticipate,” “project” and similar expressions, as well as
variations or negatives of these words. Any such statements speak
only as of the date the statements were made and are not guarantees
of future performance. The matters discussed in these
forward-looking statements are subject to a number of risks,
trends, uncertainties and other factors that could cause actual
results and developments to differ materially from those projected,
anticipated or implied in the forward-looking statements. These
factors include, among other things, the ability of Gannett and
Tribune to agree to the terms of the proposed transaction and, in
the event a definitive transaction agreement is executed, the
ability of the parties to obtain any necessary stockholder and
regulatory approvals, to satisfy any other conditions to the
closing of the transaction and to consummate the proposed
transaction on a timely basis, as well as changes in business
strategies, economic conditions affecting the newspaper publishing
business and Gannett’s ability to successfully integrate Tribune’s
operations and employees with Gannett’s existing business.
Additional information regarding risks, trends, uncertainties and
other factors that may cause actual results to differ materially
from these forward-looking statements is available in Gannett’s
filings with the U.S. Securities and Exchange Commission, including
Gannett’s annual report on Form 10-K. Any forward-looking
statements should be evaluated in light of these important risk
factors. Gannett is not responsible for updating or revising any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
relates to a proposal that Gannett has made for a business
combination transaction with Tribune. In furtherance of this
proposal and subject to future developments, Gannett (and, if a
negotiated transaction is agreed, Tribune) may file one or more
proxy statements or other documents with the U.S. Securities and
Exchange Commission (the “SEC”). This communication is not a
substitute for any proxy statement or other document Gannett and/or
Tribune may file with the SEC in connection with the proposed
transaction.
INVESTORS AND SECURITY HOLDERS OF TRIBUNE ARE URGED TO READ
THE PROXY STATEMENTS OR OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Any definitive proxy statement (if and when
available) will be mailed to stockholders of Tribune. Investors and
security holders will be able to obtain free copies of these
documents (if and when available) and other documents filed with
the SEC through the web site maintained by the SEC at
http://www.sec.gov.
This communication does not constitute a solicitation of a proxy
from any stockholder. However, Gannett and/or Tribune and their
respective directors, executive officers and other employees may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. You can find information about
Gannett’s directors and executive officers in Gannett’s definitive
proxy statement for its 2016 annual meeting of stockholders, which
was filed with the SEC on March 23, 2016, and Gannett’s annual
report on Form 10-K for the fiscal year ended December 27, 2015,
which was filed with the SEC on February 25, 2016. You can find
information about Tribune’s directors and executive officers in
Tribune’s definitive proxy statement for its 2016 annual meeting of
stockholders, which was filed with the SEC on April 19, 2016.
Additional information regarding the interests of such potential
participants will be included in one or more proxy statements or
other relevant documents filed with the SEC if and when they become
available. You may obtain free copies of these documents using the
sources indicated above.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160425005418/en/
FOR MEDIA INQUIRIES:Amber Allman, 703-854-5358Vice President,
Corporate Communicationsaallman@gannett.comorJoele Frank, Wilkinson
Brimmer KatcherJoele Frank / Michael Freitag / Ed Trissel,
212-355-4449orFOR INVESTOR INQUIRIES:Michael Dickerson,
703-854-6185Vice President, Investor
Relationsmdickerson@gannett.com
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