May 31, 2016 Last Updated 4:12 pm

Tribune Publishing likely gets in last word before important shareholder’s meeting Thursday

Earlier today Gannett again called on shareholders to vote ‘Withhold’ on all of the Tribune director nominees up for election at the Tribune 2016 Annual Meeting of Stockholders to be held later this week. Gannett continues to hope to get Tribune management to engage in negotiations regarding a sale, despite Tribune already stating that they have.

That likely won’t happen, and this afternoon Tribune Publishing responded with their own press release, saying that the board has already “thoroughly evaluated and responded to various proposals by Gannett.”

As the NYT’s DealBook said last week, Gannett lacks “any real leverage” and so has resorted to the shareholder PR campaign. It’s a long shot, to be sure, made harder by the so-called ‘white squire’ move (others know it as a ‘white knight’) where billionaire Patrick Soon-Shiong bought a nearly 13 percent stake in the newspaper publishing company, making him the second largest shareholder (and therefore lowering the influence of other shareholders).

TPUB shares closed the day up over 4 percent to $11.72 a share. Gannett’s original offer was $12.25 in cash per share deal, but that offer was raised to $15 a share a little over two weeks ago. TPUB shares hit $14.26 after the offer, but began to fall back once Tribune rejected the offer.

Here is Tribune Publishing’s response, issued this afternoon:

CHICAGO, Ill. – May 31, 2016 — Tribune Publishing Co. today issued the following statement in response to Gannett Co., Inc.’s repeated attempts to mislead Tribune shareholders and seize control of the Company.

Over the past several weeks, the Tribune Publishing Board of Directors has thoroughly evaluated and responded to various proposals by Gannett to acquire the Company. Importantly, the Board’s process and approach has been fully supported by three of the leading independent proxy voting and corporate governance advisory firms – Institutional Shareholder Services Inc. (“ISS”), Glass, Lewis & Co. (“Glass Lewis”), and Egan-Jones.

There are several important facts that Gannett continues to ignore in its desperate pursuit of Tribune:

  • Oaktree Capital Management, L.P. and Towle & Co., the two Tribune shareholders referenced in Gannett’s most recent communication, both REJECTED opportunities to sell their shares for $15.00 per share in cash. This clearly indicates they agree with the Board that Tribune shares are worth more than Gannett’s proposal.
  • Gannett has yet to put forth a compelling offer to acquire Tribune. In addition, we have yet to see evidence of committed financing from Gannett, which we believe is certainly in question given its approximately $650 million pension and OPEB liability.
  • Gannett conveniently overlooks the fact that on May 23, Tribune invited Gannett to participate in mutual due diligence in order to see if a transaction can be negotiated – the very type of engagement Gannett claims to be seeking. The only condition to proceeding is Gannett’s willingness to execute a customary nondisclosure agreement that protects Tribune’s confidential information. We have no preconceived ideas about where any discussions might lead, but we are committed engaging further in an effort to identify potential additional value for the Company’s shareholders.

The Board and management team of Tribune Publishing are committed to delivering value for all Tribune shareholders and remain unrelenting in their pursuit of value, whether on a standalone basis or through a transaction. The Company is confident in its plan to leverage technology and effectively monetize its world class content and remains focused on taking the necessary steps to transform its business in response to the massive changes that have overtaken the publishing industry.

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