Oaktree Capital, which owns nearly 15 percent of Tribune Publishing, is urging the publisher of the Chicago Tribune and the Los Angeles Times to negotiate with Gannett on a possible sale of the company.
In an SEC filing dated May 4, the Los Angeles-based investment firm said exploring a sale of the company “would be in the best interests of (Tribune Publishing) and its stockholders,” noting that Oaktree “expect(s) to communicate (with) other third parties about their respective views regarding (Tribune Publishing).”
The filing confirms a report from Reuters earlier this week, attributed to multiple anonymous sources, that Oaktree was lobbying for the company to negotiate.
Oaktree’s filing lends weight to Gannett’s $815 million gambit to buy Tribune Publishing, which was made public in late April. Michael Ferro, who controls about 16 percent of Tribune Publishing, has repeatedly and publicly rebuffed Gannett’s offer, calling it a play to “steal the company.”
On Wednesday, Tribune Publishing’s board unanimously rejected Gannett’s offer, saying it significantly undervalued the company. On Friday, the company doubled down on its decision, calling Gannett’s tactics “desperate” and justifying its decision to walk away by citing big-money deals for The Washington Post and the Financial Times.
If additional shareholders publicly supported Gannett’s takeover bid, that would further swing momentum toward the Virginia-based newspaper company. Gannett would start to have real leverage if it put together a coalition of shareholders that controlled close to 50 percent of Tribune Publishing.
Tribune, for its part, says the company is undervalued at its current stock price and articulated a moneymaking strategy this week that it says will improve the company’s financial prospects. They include treating the Los Angeles Times as a standalone business and expanding its editorial remit to cover entertainment worldwide.
On Friday afternoon, Gannett called into question Ferro’s expertise in a public statement aimed at pressuring Tribune Publishing by appealing to its shareholders.
In the end, Tribune shareholders need to consider whether they are willing to entrust their investment to a Chairman who: bought his own shares at $8.50 per share; acknowledged he knows nothing about newspapers; said the Company is not for sale; and supported the nomination of a slate of directors that includes four nominees who are long-time business associates of or have significant ties to him.