At this moment in matrimonial M&A, TroncUs has split, but the latter isn't content with the single life.
Tronc (TRNC) , the third-largest U.S. newspaper company, has walked away from its offer to buy Us Weekly, telling magazine owner Wenner Media on Friday that it decided not to finalize and announce the deal this week, as the companies had planned, several confidential sources with knowledge of the latest developments said.
American Media, familiar to those still perusing supermarket checkout reading options, has quickly re-entered the picture as a suitor. AMI, the owner of the National Enquirer, Star, OK!, Soap Opera Digest and Men's Fitness, will likely close its own deal to buy Us Weekly as soon as this week, according to the same sources, for a purchase price that could reach $100 million.
The parties -- Wenner Media, AMI and Tronc -- all refused comment on the dealmaking.
Tronc shares on Tuesday afternoon were flat at $13.11.
If completed, AMI's purchase of Us Weekly would serve as the latest marker of roil and consolidation in the entertainment/celebrity press. Both The Hollywood Reporter and Billboard remain available for sale by Eldridge Industries, and, of course, Time (TIME) is in the final stages of its auction, the centerpiece of which is People.
Watchers of Tronc and the newspaper industry will see still another reason to marvel at the actions of Tronc Chairman Michael Ferro. He and his executive teams had done rounds of due diligence on Us Weekly over a number of weeks, and agreement was reached on all terms, sources said. Why then did Tronc pull out at the last moment?
Insiders have nothing but speculation. "Maybe Ferro got some feedback after the press of the deal," one source close to the company said. Indeed, at least one longstanding board member voiced his opposition, sources said. It's also possible that Tronc Vice Chairman Patrick Soon-Shiong, who like Ferro has been buying up more of Tronc's shares, didn't support the strategy behind the acquisition.
TheStreet laid out, and raised questions about, that strategy last week. In short, within a global entertainment-centered strategy, Us Weekly was intended to provide Tronc both with more digital audience and more digital revenue. Further, the magazine's robust digital content was to be further distributed through rebuilt Tronc newspapers sites, from the Los Angeles Times to Baltimore Sun.
Ferro and his executive team may have one more reason for walking away. The company has said it is in the hunt for additional acquisitions this year; those could cost three to four times the price of Us Weekly. Tronc closed 2016 with about $200 million in cash, so it may be shepherding some of that for other deals.