Gannett to take Tribune takeover fight to shareholders meeting
Publisher of USA Today intends to push for ‘withhold’ votes for all eight Tribune Publishing board members as it continues its fight to acquire the newspaper publishing chain
The June 2 Tribune Publishing shareholders meeting may well turn out to be a referendum on the Gannett takeover bid as today Gannett announced that it intends to seek “withhold” votes on all eight nominees to the Tribune Board of Directors.
“We intend to give Tribune stockholders the opportunity to send a clear message to the Tribune Board that its lack of engagement with our Board and management team regarding our highly compelling, premium offer for $12.25 per share in cash is unacceptable,” said Gannett CEO, Robert Dickey. “We remain ready to work constructively with the Tribune Board and management to negotiate a definitive merger agreement and quickly complete a transaction that would provide significant value to both companies’ stakeholders.”
Gannett has submitted a bid to acquire Tribune Publishing, publisher of the Los Angeles Times, Chicago Tribune and other newspapers, priced at $12.25 per share. At the time that bid represented a 63 percent premium over the stock price, though today Tribune stock is set to open the week trading at $11.33 a share.
“The $12.25 per share offer price also represents a significant premium to the $8.50 share price at which Tribune recently issued common shares to its chairman Michael Ferro,” Gannett said in a press release today. “The $8.50 share price represented a discount of $0.50 or six percent from Tribune’s closing stock price on February 3, 2016, the day prior to the announcement of Michael Ferro’s investment.”
Thanks to Gannett’s bid, however, Ferro has already made a fortune thanks to Gannett driving up the price of Tribune stock.
In filing today with with the U.S. Securities and Exchange Commission Gannett appealed directly to TPUB shareholders.
“Tribune has refused to engage in constructive discussions with us. We therefore want to make you, Tribune stockholders, aware of our all-cash offer given Tribune’s attempts to delay constructive engagement,” Gannett said. “We believe a WITHHOLD vote on the Company Nominees would send a clear signal that you, as a Tribune stockholder, want your Board to engage in a meaningful dialogue with us regarding a possible business combination between our two companies.”
“We are not asking you to vote on or to approve an acquisition of the Company by Gannett at this time. Our offer is subject to customary conditions, including satisfactory completion of due diligence and the execution and delivery of a mutually satisfactory definitive merger agreement. However, a vote to WITHHOLD on each of the Company Nominees will send a clear message to the Board that Tribune stockholders support good-faith negotiations concerning our proposal.”
Tribune Publishing reports earnings on May 4th, with Gannett set to report the following day.