Gannett responds to Tribune Publishing letter, looks to pressure a start to negotiations
There appears no doubt that Gannett would like to force the hand of Tribune Publishing to accept their offer to buy the company. Gannett bid $12.25 per share, a substantial premium over the share price seen last week, appeared generous, but time is not on Gannett’s side.
Should this get strung out until June, then current Tribune chairman Michael Ferro will have majority control over the company and may be willing to reject any offer coming his way. Until then, there may be board members more eager to sell.
Knowing this, Gannett today issued another public letter, disputing Tribunes description of “a meeting” as merely a social dinner that the NAA convention. “The dinner would have been attended by a member of the Tribune team who had not been made aware of our offer, so no substantive discussion could have taken place,” Gannett’s CEO says in the letter.
Seems a bit nit-picky to me, but whatever. These kinds of negotiations are always interesting, and having been on both sides of them in the past, are often emotional.
Here is Gannett’s letter to Tribune Publishing, released by Gannett’s PR firm to the media:
April 26, 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:
I am writing in response to your letter dated April 25, 2016 with respect to our public announcement of 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.
From the time of my first contact to Tribune, all we have asked for is a substantive response to our proposal. We are heartened to hear that your board recognizes its fiduciary duties to review our proposal expeditiously and recognizes its obligation to act in the best interests of your shareholders.
It is not constructive to address the inaccuracies in your letter with respect to the events of the past few weeks and we won’t. That said, the suggestion that a meeting had been scheduled to discuss our offer – when in fact what had been scheduled well before our offer was made was a social dinner at the NAA convention – can’t go without comment. The dinner would have been attended by a member of the Tribune team who had not been made aware of our offer, so no substantive discussion could have taken place. Given that we had closed the Journal Media Group transaction just days before, Gannett chose instead to host a dinner to welcome its new JMG publishers. Tribune was well aware of Gannett’s reason for cancelling the dinner, and Mr. Ferro even commented to me that he would have done the same thing if he had been in Gannett’s position.
As we have indicated previously, we are eager to negotiate a transaction with Tribune. We believe that we can provide your shareholders with the best available price, and we expect you would give us a full and fair opportunity to achieve that result. Please let us know when and where you would like to meet.
GANNETT CO., INC.
Robert Dickey President and CEO
cc: Board of Directors, Tribune Publishing Company,
c/o Julie K. Xanders, Executive Vice President, General Counsel & Secretary