NYSE - Gannett Station

A specialist works at the post that handles Gannett on the floor of the New York Stock Exchange on Aug. 5, 2014. (Richard Drew / Associated Press)

Times staff and wire reports
April 25, 2016

USA Today publisher Gannett Co. is making an aggressive push to buy the owner of the Los Angeles Times, a move that would bolster Gannett’s position as the nation’s largest newspaper company and continue the consolidation in the industry.

The bid for Tribune Publishing for about $400 million by Gannett, which owns some 100 medium- and small-sized newspapers, would give it ownership of two of America’s largest newspapers — the Chicago Tribune as well as The Times.

Though Gannett is offering a premium price for Tribune — at $12.25 a share, a 63% increase over its closing price Friday — the deal is far from certain. Although Tribune will evaluate the offer, Chief Executive Justin Dearborn said management is working on plans of its own for a “significant transformation,” and Tribune is “well-positioned to create value for our shareholders.”

The offer sets the stage for what could be a pitched battle between two of the country’s largest — but very different — publishing companies, each of which has been seeking to secure its
future in a digital era. Tribune Publishing’s newspapers have long prided themselves on award-winning journalism with a national and international reach, and Gannett has made its mark by building its USA Today flagship into an engaging and well-designed national newspaper to accompany its growing chain of local dailies.

The outcome could depend on which side can persuade shareholders that supporting its vision for Tribune Publishing is best for them.

Tribune management must now “make a presentation that says this is what the future holds for Tribune and that’s why $12.25 is not an attractive offer” — or take the deal, said Lloyd Greif, CEO of downtown L.A. investment bank Greif & Co.

Gannett made its offer public after approaching Tribune on April 12 and being rebuffed. In a letter to the board released Monday, Gannett said Tribune’s management has refused to negotiate, setting up a fight for control of Tribune and its stable of big-city dailies.

“Gannett may be seeking to turn up the heat on Tribune’s board,” analyst Lance Vitanza of CRT Capital said in a report.

Gannett Chief Executive Robert Dickey warned in the letter, “We have determined that making your stockholders aware of our all-cash proposal is necessary, given Tribune’s attempts to delay constructive engagement.”

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