Tribune Publishing was clearly sideswiped.
Monday’s announcement of a bid for the company from Gannett for $815 million, or $12.25 per share for stock languishing of late at around $7, was met with obvious surprise by Tribune.
“I want to update you on a recent development,” Justin Dearborn, the new chief executive who comes from the healthcare industry, began in a note to employees. “A few moments ago we issued the attached press release, which details that we received an unsolicited proposal from Gannett to acquire Tribune Publishing for $12.25 per share in cash.”
He left no doubt that the offer wasn’t anticipated. “We did not seek or encourage this proposal and the Board has not been trying to sell the Company. However, as a public company, our Board is obligated to evaluate any proposal of this nature and we take this responsibility seriously. The Board is thoroughly evaluating the proposal in consultation with our independent financial and legal advisors, and will respond to Gannett promptly. The Company is committed to acting in the best interests of shareholders.”
Dearborn is a lawyer who has been an aide de camp to Michael Ferro at a healthcare firm they sold to IBM for $1 billion last year. Ferro is a Chicago tech mini-mogul who had controlling interest of The Chicago Sun-Times and recently became primary shareholder of Tribune Publishing. In less than two months, he’s been quite active in making early changes.
“As you know, we are engaged in a significant transformation of the Company,” said Dearborn, who had no prior experience in the newspaper industry. “We are focused on delivering relevant and impactful journalism that reaches the largest global audience, using innovative technology and leveraging that content to drive transactions for our partners using sophisticated tools and analytics.”
Tribune Publishing’s ambition to build global brands would seem to run smack into the obvious, well-crafted Gannett strategy to be the leader in consolidating the industry, finding efficiencies on the business side and creating a so-called USA TODAY network on the editorial side that exploits the journalism of individual newsrooms for many of their other newsrooms.
Last year, Gannett bought Journal Media Group, whose holdings included the Milwaukee Journal Sentinel, for about $280 million in cash. That deal brought it Wisconsin’s biggest newspaper, along with others it owns in important markets in the state, such as Green Bay.
As it plotted its longterm strategy, it also hired Joanne Lipman, a respected former deputy managing editor at The Wall Street Journal and founder of the editorially impressive but ultimately failed Condé Nast Portfolio magazine, was notable.
Lipman is seeking to oversee “all all content and content-related business” at the newspaper publisher. Adding The Los Angeles Times, Chicago Tribune, Baltimore Sun and eight other papers to her corporate portfolio would be a potent addition if one can smartly find editorial synergies (a quest that at times has flummoxed other companies).
While she focused on a lot of editorial possibilities, the company also zeroes in on cost savings in many areas, especially on the business side. So perhaps even before reporters and editors get nervous about consolidation, recent Gannett history would suggest that personnel in departments like human resources have greater cause to rework their resumes.
But, for now, any battle plan Lipman might have with what could be a goldmine of new talent is ancillary to what may be a boardroom — and even courtroom — fight.
At the heart is probably whether Ferro, who just took over and has ambitions to be an important media player, can hold off Gannett, maintain his role and still appease unhappy shareholders, who’ve seen the company share price plummet in the past year.
Editor’s note: The original headline on this story,”A surprised Tribune hints at a potential battle over Gannett bid,” has been changed to reflect the company’s outwardly neutral stance toward Gannett’s offer.
