Gannett abandons bid to buy Tronc
Gannett's pursuit of Tronc is over.
This morning, in a terse statement, the company announced it is no longer trying to acquire the owner of the Chicago Tribune, Los Angeles Times and several other major daily newspapers:
Gannett today confirmed that the Company has been engaged in discussions with Tronc, Inc. (NASDAQ: TRNC) (“Tronc”) regarding a potential transaction and has determined not to pursue an acquisition of Tronc.
The announcement marks the end of a months-long deal-in-the making that was fraught with twists and turns and corporate maneuvering. Had the sale gone through, it would have seen some of America's biggest and most iconic daily newspapers change hands and represented a dramatic consolidation of newspapering in the United States.
Shares of Tronc fell precipitously in early market trading, down 19.7 percent. Gannett's shares, meanwhile, were up 1.9 percent.
Gannett, which for months has been publicly mum about the possibility of a deal while sale rumors swirled, held its silence Tuesday morning, confining its remarks to the press release.
Tronc, meanwhile, issued a lengthy statement saying it made earnest efforts to negotiate a sale with Gannett. The statement also puts blame for the busted sale on Gannett, saying an agreed-upon purchase price in September was held up by Gannett's lack of financing.
"As noted previously, Tronc had serious doubts about Gannett’s ability to finance a transaction that was in the best interest of Tronc’s shareholders and other stakeholders," the statement reads. "Nonetheless, over the past several months, the Tronc Board, management team and their advisors engaged in substantive discussions and due diligence with Gannett regarding a potential transaction, with an unwavering focus on creating value for Tronc shareholders."
Tronc's defense of its own good-faith negotiations with Gannett is noteworthy because the company is facing multiple lawsuits from shareholders who accused Tronc of neglecting its fiduciary duty by letting Gannett's bid languish.
Today's announcement comes just days after the two companies were reportedly on the verge of inking a deal that would have valued Tronc at $1 billion. The bid was thwarted on the eve of Gannett's third-quarter earnings call, turning what might have been a triumphant announcement into a routine investor update with worse-than-usual news.
Today's announcement also means that Tronc will proceed for the moment under the direction of Michael Ferro, a Chicago tech mogul who became chairman of the newspaper company earlier this year and instituted a flurry of digitally minded changes that were alternately hailed and mocked.
On Ferro's watch, CEO Jack Griffin was booted and replaced with Justin Dearborn, Ferro's business associate. He also renamed the company, previously called Tribune Publishing, and moved it to the Nasdaq exchange in a move to better reflect the company's digital emphasis.
The Ferro regime also put emphasis on video production and saw the entry of Patrick Soon-Shiong, a Los Angeles-based tech billionaire whose business, Nant Capital, will reportedly infuse the company's news offerings with machine learning.
Correction: A previous version of this story misspelled the name of former Tribune Publishing CEO Jack Griffin.