Update, 2:50 p.m.: Tribune Publishing responded in a press release, calling Gannett’s statement “misleading”:
Once again, Jeff Lewis and Robert Dickey are misleading investors with half-truths and conjecture designed to mask their desperate need to acquire Tribune Publishing to save their own business and their positions. This latest statement contradicts what Gannett has been stating to our shareholders, that we haven’t been engaged in discussions. To set the record straight, Mr. Ferro’s alleged comments in the May 12 meeting were grossly mischaracterized and taken out of context. As he has stated repeatedly in public, Mr. Ferro indicated that Gannett’s previous proposal, while certainly in the best interests of Gannett shareholders, was not in the best interest of Tribune shareholders.
Gannett continues to wage its takeover battle against Tribune Publishing on multiple fronts, sending a strongly-worded letter to the company’s investors this morning that blasted its leadership and urged shareholders to abstain from voting for its board of directors nominees.
The letter, which makes the case for an $864 million acquisition bid proposed by Gannett earlier this month, urges shareholders not to “let the Tribune Board stand in the way of your obtaining superior and certain cash value” and calls the company’s strategy “substance-free, newly developed and unproven.”
The letter also says Tribune Publishing Chairman Michael Ferro is motivated primarily by “his own self-interest,” having expressed a willingness to deal with Gannett during a recent meeting so long as he had a “significant role” at the company.
Mr. Ferro has made clear that his own self-interest, and not the best interests of all of Tribune’s stockholders, is guiding his response to Gannett’s offer. During a May 12, 2016 meeting with Gannett’s chairman and Gannett’s chief executive officer, Mr. Ferro stated that a business combination between Gannett and Tribune could make sense as long as Mr. Ferro would have a “significant role” at the company post-closing and was its “largest shareholder.” Mr. Ferro went on to state that he is unwilling to engage in a process unless he, personally, would get “a piece of the action.”
Gannett’s appeal to Tribune’s shareholders comes in advance of a June 2 annual meeting where two of the company’s directors will step down, leaving a majority of the remaining directors with ties to Ferro.
Tribune has so far repudiated Gannett’s deal, saying it dramatically undervalues the company. Ferro has repeatedly accused Gannett of “trying to steal” Tribune from its shareholders and expressed confidence in a fledgling strategy that would see the Los Angeles Times become a global brand covering the entertainment business.