Second-Largest Tribune Shareholder Urges Talks With Gannett
May 18 2016 - 7:40PM
Dow Jones News
Tribune Publishing Co.'s second-largest shareholder urged the
board to engage "immediately" in talks with Gannett Co. after it
raised its unsolicited takeover offer to about $475 million earlier
this week.
In a strongly worded letter to Tribune's board, Oaktree Capital
Management Vice Chairman John Frank said he had little confidence
the company's new management team can achieve value equivalent to
what Gannett has offered.
Oaktree met with Tribune Chairman Michael W. Ferro Jr., the
company's largest single shareholder, but felt his digital
transformation strategy involved "great execution risk," given that
companies with greater resources have struggled to evolve
similarly, according to the letter.
"We see very substantial risk that through pursuing an
independent course, Tribune will destroy enormous shareholder
value," Mr. Frank wrote.
On Monday, Gannett raised its offer to $15 a share, double the
price at which Tribune shares were trading before the initial offer
was made public. Tribune's board unanimously rejected the initial
$12.25-a-share bid May 4, saying it undervalued the company, which
publishes the Los Angeles Times and Chicago Tribune.
A Tribune spokeswoman said Wednesday that the board was
continuing to review Gannett's latest offer and "remains committed
to continuing to act in the best interests of all
shareholders."
Oaktree, which owns a 14.8% stake in Tribune, had previously and
publicly urged the company to engage in talks with Gannett, but
Wednesday's letter had a much sharper tone in pressuring the board.
Oaktree said it has also met with representatives of Gannett.
"In summary, we have not seen anything to give us any confidence
that Tribune on its own, with the resources and competitive
position it has today, can achieve over any reasonable period of
time the value for shareholders that we believe can likely be
achieved through a transaction with Gannett," the letter read.
Write to Lukas I. Alpert at lukas.alpert@wsj.com
(END) Dow Jones Newswires
May 18, 2016 19:25 ET (23:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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