Tribune Publishing (TPUB) is still in play.
Gannett(GCI) - Get Report on Tuesday reiterated its $15 per share hostile takeover offer for Tribune, owner of the Los Angeles Times, Chicago Tribune and nine other metro daily newspapers in a deal valued at about $864 million including debt.
Gannett said the large number of shareholders that opposed the election of Tribune's board last week emboldened the company to reaffirm its offer. Chairman Michael Ferro and Tribune's directors, who ultimately received a majority of shareholder support at last week's annual meeting, have twice rejected Gannett takeover offers and have repeatedly rebuffed requests to negotiate a sale to the owner of USA Today and more than 100 daily newspapers.
"Gannett continues to believe that the Tribune Board should engage constructively with Gannett toward negotiating a merger agreement that benefits both companies' stockholders," the company said in a statement. "Gannett also believes it is imperative for due diligence to occur soon given the apparent rapid series of changes taking place inside Tribune that may diminish the value of Tribune to Gannett."
Yet even as Gannett reaffirmed its bid, Tribune share were falling on 0.9% on Tuesday to $12.90, reflecting shareholder concern that a deal may never come to fruition.
The reasserted buyout offer follows a shareholder vote that underscored wide support for Gannett's bid.
A final tally of shareholders revealed that five of the eight nominated directors received less than 50% support from owners of shares not affiliated with Ferro or the company. Ferro holds a 17% stake in the company while the billionaire investor Soon-Shiong, who has previously worked with Ferro, recently acquired a 14% stake in the company after being issued new shares in part to weaken dissident shareholders.
The number of shareholders voting to 'withhold' their support for the board or oppose it entirely was unusually high considering that investor revolts are rare at U.S. corporations and that the independent proxy advisory firms, Institutional Shareholder Services and Glass, Lewis said prior to the vote that they supported the Ferro-backed slate.
Gannett's bid has also been bolstered by at least two shareholder lawsuits filed over the last 10 days in Delaware court charging that Ferro had acted for personal gain rather than in shareholders' the best interest when he and his board chose not to negotiate a deal with Gannett.
Oaktree Capital, one of Tribune's largest shareholders, said in a filing on Friday that it would be willing to sell its stake at $15 per share provided that other shareholders could get the same terms. Oaktree emphasized that Tribune was wrong to claim that the investment firm, one of the company's top three shareholders, supports the publisher's current management.
Oaktree has called on the board to establish a committee of unaffiliated board members to assess Gannett's takeover offer.
"Lest there be any doubt, however, we would sell our shares at $15 per share - and believe that all shareholders should be afforded the opportunity to do so - if the only alternative is to rely on your continued leadership of the company," Oaktree said in a filing signed by Vice-Chairman John B. Frank.
For his part, Ferro told CNBC that Tribune was in talks with investors willing to buy a stake at $15 per share to be a minority stakeholder in the publisher. He intimated that a buyout offer would have to go above $15 per share, which represents a 99% premium to where Tribune was trading prior to Gannet's offer being made public.
"We said we have people who are willing to invest, which is different than a takeover, which is a premium," Ferro said in an interview with CNBC on Monday. "We said we had people who are willing to invest, because people believe that our assets, if we bring technology to it is going to be worth far more money."
Ferro's vision for Tribune appears to be focused on making the company's news more accessible on social media platforms. In his CNBC interview, Ferro spoke at length about making Tribune content easy to get for users of Facebook and Snapchat, adding that Tribune had failed to invest in technology during its years in bankruptcy.
"We are a little behind," he said with a pinch of sarcasm.