Tribune Publishing’s No.2 shareholder pushes for sale
The second-largest shareholder of Los Angeles Times owner Tribune Publishing said Wednesday that passing up a buyout offer from rival publishing company Gannett could “destroy enormous shareholder value.”
In a letter sent to Tribune’s board and filed with the Securities and Exchange Commission, downtown L.A. investment firm Oaktree Capital Management made clear it wants the board to reconsider selling to Gannett and raised serious concerns about the turnaround plans of new Tribune Chairman Michael Ferro.
The board this month rejected an offer of $12.25 a share from Gannett, which responded this week by raising that offer to $15 a share. That’s a 99% premium to Tribune Publishing’s stock price before Gannett went public with its proposal last month.
Oaktree, which owns 14.8% of Tribune Publishing’s shares, this month urged the company’s board to negotiate with Gannett. It took a firmer stance in Wednesday’s letter, pushing for the sale and saying Ferro’s plans for a Tribune turnaround are “preliminary and involve great execution risk.”
Ferro’s plans include ramping up global entertainment coverage and increasing online revenue by using artificial intelligence to suggest stories to readers and keep them on Tribune websites longer.
Ferro is Tribune Publishing’s largest shareholder, with a 16.5% stake.
In short, Oaktree said it is not confident that Tribune, as a stand-alone company, can give shareholders the kind of value offered by Gannett’s offer.
“We see very substantial risk that through pursuing an independent course, Tribune will destroy enormous shareholder value,” Oaktree wrote. “We are convinced that you and Tribune’s management should engage Gannett immediately.”
Tribune Publishing spokeswoman Dana Meyer said in an email that the company’s board is reviewing Gannett’s new, higher offer and “remains committed to continuing to act in the best interests of all shareholders.”
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5:07 p.m.: This article has been updated with a description of Michael Ferro’s turnaround plans.
The article was originally published at 4:14 p.m.
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