May 6, 2016 Last Updated 1:33 pm

Gannett responds to Tribune Publishing’s ‘Investor Fact Sheet’

Newspaper acquisition battle is heating up in preparation for the Tribune Publishing shareholder meeting in June, with second largest shareholder, Oaktree Capital, encouraging a sale to Gannett

The battle between Tribune Publishing and its suitor Gannett is reminiscent of the battle involving Meredith, MediaGeneral and Nexstar Broadcasting – only the Trib-Gannett battle is a little less civilized. Think Trump v. Cruz.

Filing-strEarlier today Tribune Publishing released an ‘Investor Fact Sheet’ giving seven reasons why the $815 million offer from Gannett was not worth accepting. After reason three which describes Gannett’s offer as “opportunistic and understates Tribune’s true value” the fact sheets runs out of steam – at least in my opinion.

This afternoon, Gannett responded with its own statement which feels very much like a direct attack on Michael Ferro, the new chairman of Tribune Publishing, who got in his position when he invested $44.4 million in the company in February. Ferro soon jettisoned Jack Griffin as CEO of the company and brought in his own guy to be CEO, Justin Dearborn, who has worked with Ferro at Merge Healthcare.

Adding to the pressure on Tribune’s management team is the knowledge that the company’s second largest shareholder, Los Angeles-based Oaktree Capital Management, is solidly behind a sale to Gannett. They filed a Form SC 13D/A today with the SEC, reiterating they “believe that it would be in the best interests of the Issuer and its stockholders for the Issuer to pursue discussions with Gannett to see if an acceptable agreement can be reached for Gannett to acquire the Issuer (Tribune Publishing).”

This is getting to be quite a soap opera, as was the failed Meredith-Media General merger. But this one feels nastier… and more entertaining. Make some popcorn, settle in, because the TPUB shareholder’s meeting is not until June.

Here is Gannett’s response to Tribune Publishing’s ‘Investor Face Sheet’:

May 6, 2016

Statement in Response to Tribune Publishing Company’s May 6, 2016 Filing:

Gannett Co., Inc. (“Gannett”) believes the recent actions and statements by the Tribune Publishing Company (“Tribune”) Board of Directors reflect complete disregard for its responsibility to shareholders – the true owners of Tribune.


Gannett has offered Tribune an all-cash $12.25 per share offer that represents a 63 percent premium to Tribune’s closing stock price on April 22, 2016, which the Tribune Board of Directors has flatly rejected.

The Tribune Chairman of the Board has stated:

  • “There’s no price… We’re not for sale. We’ll always listen to everybody but we’re not for sale.” – Chicago Tribune, May 5, 2016
  • “I don’t know anything about the newspaper business… I like to be in businesses that I know something about.” – Chicago Magazine, October 11, 2013

Bob Dickey, President and CEO, Gannett


The comparable transactions and trading companies multiples suggested as valuation benchmarks by Tribune are inappropriate and misleading:

  • Tribune highlights only two outlier newspaper transactions. The Financial Times and Washington Post sales multiples are not comparable given the very different business attributes of the Financial Times and the financial condition of the Washington Post at the time of the sale.
  • Tribune has ignored more than 20 U.S. daily newspaper transactions from the past 24 months that are more appropriate benchmarks.
  • The public company analysis as portrayed by Tribune is also misleading as it includes inappropriate non-peer companies which distort the multiple.


The sale of approximately 16 percent of Tribune’s shares to its Chairman, Michael Ferro, approximately 90 days ago at $8.50 per share (a discount of $0.50 or six percent from Tribune’s closing stock price the day prior to announcement) was followed by a series of steps by Tribune’s Board that have conveyed disproportionate control to Mr. Ferro.  The Board first appointed Mr. Ferro’s close business associate as CEO and director, then appointed three additional directors and at its 2016 Annual Meeting on June 2, 2016, will reduce the size of the Board such that five of the eight remaining directors will be Mr. Ferro and his closely affiliated nominees.

In the end, Tribune shareholders need to consider whether they are willing to entrust their investment to a Chairman who: bought his own shares at $8.50 per share; acknowledged he knows nothing about newspapers; said the Company is not for sale; and supported the nomination of a slate of directors that includes four nominees who are long-time business associates of or have significant ties to him.

Gannett views the “withhold” campaign as an important opportunity for Tribune shareholders to make their views known.  By voting withhold, shareholders will send a clear message to their board to engage with Gannett with respect to our proposal.


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