Shares of Gannett Co., the publisher that owns USA Today, climbed as much as 9% Thursday on a report that it has held talks with Gatehouse Media about a possible merger that would unite the two largest newspaper chains in the U.S.
Gannett also has discussed deals with Tribune Publishing Co. and McClatchy Co., the Wall Street Journal said, citing unidentified people familiar with the matter. Gannett and Gatehouse didn’t immediately respond to requests for comment.
Large newspaper companies, plagued by diminishing advertising and competition from digital upstarts, are increasingly looking for ways to team up. But Gannett hasn’t welcomed all comers: It spurned a hostile $1.36-billion offer from MNG Enterprises Inc. in January.
MNG, which is controlled by the hedge fund Alden Global, also embarked on a failed campaign to get representation on Gannett’s board. At its annual meeting this month, Gannett shareholders rejected the three directors proposed by MNG.
Employees at Gannett feared that an MNG takeover would bring severe job cuts to the struggling company. Gannett has suffered its own layoffs, but the cuts haven’t gone as deep as those made by MNG at the Denver Post, the St. Paul Pioneer Press and other daily newspapers it owns.
Shares of Gannett rose as high as $8.34 on Thursday, but drifted back down to close at $7.75, a gain of 2%. Before Thursday’s rally, Gannett was down 11% this year.