Gannett Raises Bid for Tribune Publishing
May 16 2016 - 8:50AM
Dow Jones News
Gannett Co. said Monday that it raised its all-cash offer for
Tribune Publishing Co. to about $475 million, just two weeks after
Tribune's board rejected a lower bid.
Gannett raised its offer to $15 a share, a proposal valued at
about $475 million when excluding about $385 million of outstanding
debt.
The revised offer represents a 22% increase over its prior bid
and a nearly 100% premium over Tribune Publishing's share price of
$7.52 on April 22, the last trading day before Gannett made public
its initial offer of $12.25 a share April 25. Gannett's first
proposal was valued at about $400 million plus the assumption of
debt.
"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," Gannett Chairman John Jeffry Louis said. "It is evident
from our discussions with Tribune shareholders that there is
overwhelming support for the companies to engage immediately."
A representative from Tribune Publishing wasn't immediately
available for comment. The company has said the initial bid
undervalued the company.
Tribune and Gannett have sent increasingly terse public letters
back and forth since Gannett first went public with its offer.
Tribune has accused Gannett of "playing games" and calling its
approach "aggressive and hostile." Gannett has urged Tribune's
shareholders not to back Tribune's slate of board nominees at the
annual meeting June 2 to send a message to the company to engage in
talks.
Last week, Tribune approved a so-called poison pill as part of
its defense to try to stop Gannett from acquiring the publisher of
the Los Angeles Times and other newspapers. Gannett owns USA Today
and 107 other U.S. dailies. Shareholder rights plans, or poison
pills, are designed to dilute the value of a stock by flooding the
market with additional shares if certain conditions are met, making
it expensive for an investor to acquire a controlling stake.
Shares of Tribune Publishing rose 22% to $14 in premarket
trading.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 16, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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