Why Gannett Should Take Another Stab at Tronc
Tronc's Los Angeles Times

Newspaper publisher Tronc Inc.  (TRNC) is trading at a deep discount to its peers, revenue is mired in a persistent decline, and the company's stock has slumped even as shares in New York Times Co. (NYT) and News Corp. (NWSA) , owner of The Wall Street Journal, have surged. 

Meanwhile, Michael Ferro, Tronc's chairman and its largest shareholder, has sought to expand the company's digital businesses through acquisitions. Yet in the case of US Weekly, a Tronc spokesman said the company backed away from the celebrity magazine in March after a process of "due diligence," while its pursuit of the Chicago Sun-Times was thwarted by a Department of Justice decision to prevent the owner of the Chicago Tribune from also owning the city's second-largest daily newspaper.

Ferro, a brash venture-capital investor turned media owner, was eager to aggregate a larger metro audience by pairing the two newspapers. But the DOJ, citing media consolidation concerns, intervened on behalf of a rival bidder.

So what's next for Tronc, the company formerly known as Tribune Publishing that also owns the Los Angeles Times, the Baltimore Sun and the Orlando Sentinel?

Back in November, Gannett Co. (GCI) , publisher of USA Today and some 100 daily newspapers, ended a nearly six-month quest to acquire Tronc, offering as much as $18.75 per share. Since late October, when Gannett's banks pulled out of that proposed transaction, valued at about $673 million, Tronc shares have fallen 25%.

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