Gannett reportedly sweetens its offer to buy Tronc
Three months after its last offer was spurned, Gannett Co. is reportedly back with an increased bid to buy Tronc Inc., the newspaper chain formerly known as Tribune Publishing, which owns the Los Angeles Times.
Gannett left its rejected $15-a-share bid on the table since May, waiting for Tronc’s second-quarter earnings, released Aug. 3.
Industry sources said last week that Gannett was conducting due diligence on Chicago-based Tronc in preparation for another potential offer. News of Gannett’s new bid for an undisclosed price was first reported Wednesday night by the Wall Street Journal, citing unnamed sources familiar with the situation.
Tronc spokeswoman Dana Meyer declined to comment Thursday morning, as did Gannett spokesman Nick Lamplough.
Tronc shares jumped 4.4% on Thursday to close at $15.95. Gannett shares edged up a penny to $12.14.
The previous $15-a-share bid by Gannett, the McLean, Va., publisher of USA Today and more than 100 other newspapers, valued Tronc at $864 million, including debt. Tronc Chairman Michael Ferro and the board rejected that offer, saying their plan for leveraging the digital assets of the legacy newspaper chain would bring more value to shareholders.
Tronc has rebuffed Gannett since an unsolicited $12.25-a-share offer was made public in April, adopting a “poison pill” approach to prevent a tender offer and force negotiations to run through the board.
Since then, shareholders have increased pressure on Tronc to negotiate with Gannett, with several lawsuits filed and a larger one looming. In June, investment firm Oaktree Capital Management, which owns roughly 13% of Tronc’s shares, requested records to determine whether to initiate a shareholder derivative suit.
In addition to the Los Angeles Times, Tronc owns 10 major daily newspapers, including the Chicago Tribune. The company spun off from Tribune Media Co. in August 2014.
Ferro, a technology entrepreneur who previously owned the Chicago Sun-Times, became chairman of Tronc and its largest shareholder when his investment firm bought a 16.6% stake in February, a $44.4-million deal that priced the stock at $8.50 a share.
In June, Tribune Publishing was renamed Tronc — short for Tribune online content, the company’s digital strategy — and its stock was moved from the New York Stock Exchange to Nasdaq.
Twitter: @RobertChannick
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UPDATES:
2 p.m.: This article was updated with stocks’ closing prices.
6:50 a.m.: This article was updated with Tronc’s and Gannett’s stock prices.
This article was originally published at 6:45 a.m.
