Gannett, which counts USA Today, The Des Moines Register and the Detroit Free Press among its holdings, said it is prepared to offer $15 per share, up from its earlier $12.25 bid. The pitch values Tribune at just under $480 million, and would include the assumption of approximately $385 million of the publisher’s debt. That raises the value of the potential pact to $864 million. Gannett said the revised offer is a 99% premium on Tribune’s closing price of $7.52 per share on April 22, the last trading day before the company publicly announced its initial offer for Tribune.
The richer offer will put pressure on Tribune’s leadership. In rejecting the proposal, Tribune CEO Justin Dearborn called the Gannett’s pitch “opportunistic” and said the company was in the early stages of executing a plan to make itself more global and digital, and consequently more profitable. However, some shareholders, such as Southern California-based Oaktree, have urged Tribune to at least explore a sale.
In another attempt to force a Tribune sale, Gannett sent an appeal directly to Tribune’s shareholders, asking them to withhold their votes for members of the company board in a vote set for June 2. Such a move ” would send a clear signal that you, as a Tribune stockholder, want your Board to engage in a meaningful dialogue with us regarding a possible business combination between our two companies,” according to a proxy statement filed with the SEC Monday.
Chicago-based Tribune Publishing issued a statement promising to “thoroughly review” the latest offer from Gannett, the largest newspaper publisher in America, by circulation. Tribune said it was getting financial advice from Goldman, Sachs & Co. and Lazard and legal advice from Kirkland & Ellis LLP.
James Rainey contributed to this story.