Tribune Publishing’s latest move to thwart Gannett is to adopt ‘poison pill’ measure
In another effort to stop Gannett’s takeover bid, the publisher of the LA Times and Chicago Tribune file changes that would make it more expensive for Gannett to acquire TPUB shares, offering shareholders double the exercise price should a majority buyer come in
The current executives of Tribune Publishing, the publisher of such newspapers as the Los Angeles Times and Chicago Tribune, is working hard to make sure it doesn’t become the former executives of Tribune Publishing. Today the newspaper publisher unveiled its latest effort to thwart Gannett’s takeover effort: a poison pill – or as Tribune called it, a limited duration Shareholder Rights Plan.
“Based on Gannett’s approach and continued hostility, the Board is taking prudent measures to protect our shareholders’ best interests. The Rights Plan ensures shareholders receive fair treatment and protection in connection with any proposal to acquire Tribune Publishing and retain the opportunity to realize the value of their investment in the Company,” said Justin Dearborn, CEO of Tribune Publishing. “Our Board is unanimous that Gannett will not succeed with its current tactics and low ball price.”
Here is the poison pill, as outlined in an SEC filing, and then an explanation:
Basically what this means is that if anyone comes in any buys more than 20 percent of the company, the remaining shareholders can sell their shares at twice the exercise price.
Gannett, as you can imagine, is not happy about any of this.
“It is unfortunate that instead of engaging with Gannett to negotiate a mutually agreeable transaction that is in the best interests of all Tribune stockholders, Tribune is putting up another roadblock to prevent its stockholders from realizing compelling, immediate and certain cash value for their investment,” Gannett said in a statement today. “The decision to implement a poison pill is yet another demonstration that Tribune’s Board and management team are not listening to its stockholders. Gannett continues to believe in the strength of its $12.25 per share all-cash proposal and its ability to advance Tribune’s publications and journalism as part of Gannett’s USA TODAY NETWORK.”
As for shareholders, they are not exactly happy either. With the price Gannett has offered may not be high enough for many, the fact that Tribune is not opening negotiations is a problem as they see it.
TPUB shares were down sharply earlier this morning, but have recovered almost all their losses and now are now trading only slightly down.