May 4, 2016

Tribune Publishing on Wednesday announced its board unanimously rejected an $815 million acquisition offer from the newspaper company Gannett.

In its letter to Gannett, Tribune Publishing says the acquisition bid “understates the Company’s true value and is not in the best interests of its shareholders.”

Tribune Publishing is in the early stages of a compelling transformation, with a well-defined strategic plan to drive increasing monetization of our important brands, capitalize on the global potential of the LA Times and significantly accelerate our conversion of content to revenue through an enhanced digital strategy,” said [Tribune Publishing] CEO Justin Dearborn.

Gannett responded to the rejection in a statement Wednesday afternoon, saying the company might be willing to improve its proposal after examining Tribune’s books. But that would require further negotiation, which Gannett says Tribune has thus far avoided.

It is unfortunate that Tribune’s Board would deny their shareholders this compelling, immediate and certain cash value by rejecting our offer without making a counterproposal or otherwise negotiating or providing any constructive feedback. Our requests for access to due diligence that may enable us to improve our proposal continue to be denied to the detriment of Tribune’s stockholders.

Wednesday’s back and forth comes after a series pointed exchanges between Gannett’s CEO, Robert Dickey, and Michael Ferro, the primary shareholder of Tribune Publishing, which owns the Los Angeles Times, Chicago Tribune, Baltimore Sun and eight other major daily newspapers.

Ferro, a tech mogul who came to power at Tribune early this year by buying up shares and ousting former CEO Jack Griffin, has repeatedly framed Gannett’s $815 million bid as an act of corporate thievery. In an interview with the Los Angeles Times last week, he accused Gannett of “trying to steal the company” from its board. Tribune reiterated that line in a statement to CNN earlier this week.

Gannett, meanwhile, has accused Tribune of misrepresenting the runup to negotiations and called the newspaper company’s behavior “erratic and unreliable.” In an interview with Poynter last week, Dickey struck a conciliatory note, emphasizing that he was eager for an opportunity to sit down with Tribune’s board to negotiate.

Gannett wasn’t alone in its urging Tribune Publishing’s board to negotiate. Oaktree Capital, the company’s no. 2 shareholder, also expressed support for the sale to Gannett, according to an anonymously sourced report from Reuters.

Tribune Publishing went public with its rejection less than an hour before the company’s scheduled quarterly earnings call with shareholders in which it plans to unveil a moneymaking strategy. In his interview with the Los Angeles Times last week, Ferro hinted the strategy would include a “content monetization engine” that would rely on artificial intelligence to target Tribune’s journalism for optimum distribution.

Earlier Tuesday, Tribune Publishing reported a $6 million loss in the first quarter of 2016. Setting aside business operations of the San Diego Union-Tribune, which Tribune agreed to buy in May 2015, total revenues were down by 7.4 percent and advertising revenues were down by 12.4 percent.

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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…
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