Gannett, Citing Tribune Shareholder Vote, Continues Merger Pursuit
June 07 2016 - 9:10AM
Dow Jones News
Gannett Co. on Tuesday said it would continue to pursue its
unsolicited $475 million cash offer for Tribune Publishing Co., as
it believes there is enough shareholder support for a tie-up that
Tribune's board has twice rebuked.
The move comes a day after Tribune said it more than 40% of its
shareholders withheld support for the company's slate of directors
at its June 2 annual meeting, suggesting many shareholders favor a
merger. Gannett had urged shareholders to withhold votes for
Tribune's board nominees at the meeting as a way to symbolically
show support for its latest takeover offer of $15 a share, which
Tribune had rejected.
Tribune's stock rose 7.3% to $13.96 in premarket trading.
Gannett said it would keep its offer on the table as it
"evaluates various near-term developments," including Tribune's
second-quarter results, due in August. Gannett also warned that the
corporate revamp of Tribune, championed by its chairman, Michael W.
Ferro Jr., could undermine the value of its sweetened offer.
Tribune announced last week that would change its name to Tronc
Inc., the latest shake-up under Mr. Ferro, who had also unveiled a
new digital-first strategy for the company and brought on new
investors and board members.
The company said in a news release that Tribune should engage in
discussions soon, "given the apparent rapid series of changes
taking place inside Tribune that may diminish the value of Tribune
to Gannett."
A representative from Tribune Publishing wasn't immediately
available Tuesday for comment.
According to a regulatory filing Monday, 41.4% of voting
shareholders withheld votes for Chief Executive Justin Dearborn and
41% withheld votes for Mr. Ferro, the company's largest shareholder
with a roughly 16.5% stake in the company.
Later on Monday, Gannett released the tally of votes cast by
shareholders unaffiliated with the company. Those results showed
just over 50% had withheld their votes for Messrs. Ferro and
Dearborn, and more than half withheld votes for board members
Philip Franklin, David Dibble and Eddy Hartenstein. But the other
three board members were able to garner slightly over 50% of the
unaffiliated shareholders' approval.
In April, Gannett first offered to buy Tribune for $12.25 a
share in cash. Tribune's board rejected that offer, prompting
Gannett to raise its bid to $15 a share.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
June 07, 2016 08:55 ET (12:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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