May 16, 2016

Gannett is trying to make Tribune Publishing Chairman Michael Ferro an offer he can’t refuse.

On Monday morning, Gannett upped its bid to purchase the publisher of the Los Angeles Times, the Chicago Tribune and nine other major dailies to $864 million, an increase of nearly $50 million from its previous offer of $815 million. The increased offer now values the acquisition at $15.00 per share, up from its April 22 offer of $12.25 per share.

In a statement Monday morning, Gannett Chairman John Jeffry Louis said the increase “demonstrates our commitment to engaging in serious and meaningful negotiations with the Tribune Board to reach a mutually agreeable transaction where Gannett acquires all of Tribune.”

It is evident from our discussions with Tribune shareholders that there is overwhelming support for the companies to engage immediately regarding our proposed transaction. By increasing our offer at this time, we are reaffirming Gannett’s belief that this transaction would deliver significant value to both companies’ stakeholders and that the time to act is now. We encourage Tribune’s shareholders to send a clear message to their Board to engage immediately with Gannett regarding our revised all-cash, premium offer.

The offer is aimed at ginning up shareholder support for the deal, which has so far been steadfastly rejected by Tribune Publishing’s leadership. In a presentation to investors filed with the Securities and Exchange Commission last week, Tribune Publishing called Gannett’s offer an “opportunistic raid” that dramatically undervalued the company, comparing Gannett’s offer to hefty acquisition bids for the Financial Times and The Washington Post. Gannett fired back, calling Tribune Publishing’s comparisons “inappropriate.”

Representatives from the two companies reportedly met last week, but they didn’t make any progress on a deal.

There are early signs that Tribune investors may be receptive to a deal, however. Oaktree Capital, Tribune Publishing’s No. 2 shareholder, recently expressed support for negotiations with Gannett.

To foil Gannett’s takeover, Tribune Publishing has adopted a “poison pill” tactic, which permits the board to radically alter the company’s capital structure if Gannett acquires enough shares.

Update, 11:30 a.m.: The market reacted favorably to Gannett’s sweetened deal for Tribune Publishing, with Tribune stock up 22 percent in mid-morning trading.

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Benjamin Mullin is the managing editor of He previously reported for Poynter as a staff writer, Google Journalism Fellow and Naughton Fellow, covering journalism…
Benjamin Mullin

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