Los Angeles Times Owner Rejects Gannett's Increased Bid, Offers to Start Deal Talks
A healthcare billionaire buys a 12.9 percent stake in Tribune Publishing, which offers "discussions to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated."
Tribune Publishing, the owner of the Los Angeles Times and Chicago Tribune, on Monday said that its board of directors has "thoroughly evaluated" a $864 million increased takeover offer by USA Today owner Gannett Co. and decided to reject it just like an earlier bid.
Gannett offered to acquire all of Tribune Publishing for $15.00 per share in cash.
Tribune Publishing said that its board "has again rejected the Gannett proposal as not in the best interests of Tribune shareholders, but invited Gannett to agree to a mutual non-disclosure agreement, under which both parties could engage in due diligence and discussions to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated."
Added the company: "There can be no assurances that any such agreement can be reached."
Tribune Publishing CEO Justin Dearborn said: “The Gannett $15.00 per share proposal for all of Tribune is clearly inadequate as a control investment in Tribune and, as [shareholder advisory firm] ISS has pointed out, our board 'has grounds to decline to engage’ on Gannett’s proposal."
He said the company continues to have "serious doubts about Gannett’s ability to enter into a transaction ... that makes sense for Tribune and its stakeholders," highlighting Gannett's approximately $650 million in pension and other liabilities.
The Los Angeles Times owner on Monday also unveiled a $70.5 million investment from Nant Capital, which makes Nant Tribune Publishing’s second-largest shareholder with a 12.9 percent stake. Nant is the company of healthcare billionaire Patrick Soon-Shiong, who will become vice chairman of Tribune Publishing as of early June.
"We remain unrelenting in our pursuit of value whether on a stand-alone basis or through a transaction," said Dearborn, calling the new investment as coming in support of the firm’s "transformation strategy" beyond the traditional newspaper business.
He concluded: "However, we stand ready to work with Gannett to assess whether there is a path forward that will create more value for both sets of shareholders. We have no preconceived ideas about where these discussions might lead, but the board is committed to engaging further in an effort to identify potential additional value for the company’s shareholders."