Gannett Co. renewed its push Friday to acquire Tribune Publishing — owner of the Los Angeles Times and Chicago Tribune — and gained an important ally when the second-largest holder of Tribune stock called for Chicago-based company to reverse its decision rejecting the deal.
In a new salvo at weeks end, McLean-Va.-based Gannett, the largest newspaper publisher in America, unleashed a salvo on Tribune chairman Michael Ferro, suggesting that the entrepreneur has gotten out-sized control of Tribune, via his minority investment.
Tribune Publishing on Wednesday formally rejected Gannett’s unsolicted $815 million buyout offer for the company that owns the papers in Los Angeles and Chicago, along with the Baltimore Sun, Orlando Sentinel, Hartford Courant and four other daily papers. Tribune characterized the offer as too low, with Ferro accusing Gannett of trying to “steal the company.”
Gannett responded Friday by detailing the transactions by Ferro during the past few years that allowed him to assume control of the company — moves that have raised eyebrows among observers given his lack of experience in publishing and journalism. Earlier this week, Gannett said it would push Tribune shareholders to withhold votes for Ferro and other board members at Tribune’s annual meeting on June 2.
Gannett in its statement zeroed in on the deals that allowed Ferro to scoop up Tribune shares at a below-market price and the board’s decision to appoint a former Ferro business associate, Justin Dearborn, as CEO despite his lack of publishing experience.
“Tribune shareholders need to consider whether they are willing to entrust their investment to a Chairman who: bought his own shares at $8.50 per share; acknowledged he knows nothing about newspapers; said the Company is not for sale; and supported the nomination of a slate of directors that includes four nominees who are long-time business associates of or have significant ties to him,” Gannett said.
Meanwhile Southern California-based Oaktree said in a Securities and Exchange Commission filing that it believes Tribune should not sumarrily reject the offer from Tribune and others that might come forward.
Oaktree said “it would be in the best interests of (Tribune) and its stockholders for (Tribune) to pursue discussions with Gannett to see if an acceptable agreement can be reached for Gannett to acquire (Tribune).”
In this week’s SEC filing, Oaktree also called on Tribune “in the event one or more other parties express an interest in acquiring the Issuer, be open to discussions with such parties regarding such an acquisition.”
Oaktree signalled that it is ready to apply pressure to try to get the Tribune board to be more open to a sale. The investment fund said it would contact other Tribune shareholders about their views on a Gannett buyout. The SEC filing suggests that other shareholders could join Oaktree in voting to alter membership in the Tribune board or come together to influence future business and buyout attempts.