Tribune Holders Vote to Re-Elect Board
June 02 2016 - 2:10PM
Dow Jones News
Tribune Publishing Co. said shareholders voted, as expected, to
re-elect the company's board nominees at its annual meeting
Thursday.
But the publisher of the Chicago Tribune and Los Angeles Times
didn't give the exact breakdown of the vote, giving no indication
of how much support Gannett Co. garnered for its "withhold"
campaign. Gannett was encouraging shareholders to withhold their
votes for the board as a symbolic gesture of no confidence and
support for Gannett's takeover attempt.
Gannett was unable to offer a competing slate of directors as it
had initiated its unsolicited pursuit of Tribune after the deadline
had passed to wage a proxy fight.
USA Today owner Gannett has said it would review whether to
proceed with its takeover approach after the result of the vote,
after Tribune rejected bids at $12.25 and $15 a share—63% and 99%
premiums, respectively, over Tribune's share price before Gannett
made its first bid public.
A representative from Gannett couldn't immediately be reached
for comment Thursday.
Tribune has argued that Gannett's offers undervalued the company
and that more value could be derived from Mr. Ferro's plan to
modernize its 11 newsrooms—revolving around a technology platform
called "Tronc," using things like artificial intelligence and
"machine vision" technology—if it is given the time to take
hold.
The company last week took the unorthodox approach of selling
4.7 million shares of its stock to medical doctor and billionaire
investor Patrick Soon-Shiong at $15 apiece—the price Gannett had
proposed in its sweetened bid.
Dr. Soon-Shiong's investment in Tribune, a 12.9% stake at $70.5
million, made him the company's second-largest shareholder. It also
made the company more expensive for Gannett to purchase, as it
would presumably have to purchase Dr. Soon-Shiong's additional
shares, which could push the total cost of the company up.
As part of the deal, Dr. Soon-Shiong was slated to take a seat
on Tribune Publishing's board as vice chairman, starting Thursday
after the shareholder meeting.
Mr. Ferro had marshaled the support of three proxy-advisory
firms, Institutional Shareholder Services, Glass, Lewis & Co.
and Egan-Jones Rating Co., and big institutional investors often
follow the recommendations of those firms.
Meanwhile, a Tribune shareholder, Capital Structures Realty
Advisors LLC, filed a lawsuit against Mr. Ferro and the rest of the
Tribune board, seeking to block the sale of stock to Dr.
Soon-Shiong. Dr. Soon-Shiong, in an interview, said he had only
heard of the lawsuit through the media Thursday morning and had not
reviewed the complaint.
A merger of the two companies would tie household their
household news outlets up under one firm, as newspaper companies
have struggled in recent years in part from disruptions caused by
the internet.
Write to Joshua Jamerson at joshua.jamerson@wsj.com and Lukas I.
Alpert at lukas.alpert@wsj.com
(END) Dow Jones Newswires
June 02, 2016 13:55 ET (17:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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