- Offer of $15 a share is 22 percent more than previous $12 bid
- Tribune adopted poison pill May 9 to thwart ‘low-ball’ price
Gannett Co., escalating its hostile takeover for Tribune Publishing Co., raised its all-cash offer for the owner of the Chicago Tribune and Los Angeles Times to about $864 million.
The new $15-a-share bid is 22 percent more than the $12.25 Gannett offered publicly on April 25, two weeks after unsuccessfully making a private bid. The total value of the deal includes about $385 million of debt outstanding as of March 27, McLean, Virginia-based Gannett, publisher of USA Today, said in a statement Monday. Tribune shares jumped.
Gannett raised its bid after re-examining Tribune’s financial information filed May 5 and after an unproductive meeting with Tribune officials last Thursday in Chicago, Gannett Chairman John Jeffry Louis said in an interview.
“We were able to get more comfortable that there are even better synergies around printing and distribution,” Louis said.
Tribune said in a separate statement that it’s reviewing the new proposal. Its board voted on May 4 to reject the original offer and last week unanimously decided to adopt a so-called poison pill measure. Under the plan, which stays in effect for one year, if an investor acquires 20 percent of the company, other stockholders will be awarded additional shares. At the time, Chief Executive Officer Justin Dearborn called Gannett’s offer a “low-ball price.” A day later, Tribune Chairman Michael Ferro, speaking on Bloomberg TV, said the offer was good for Gannett, but not good for Tribune investors.
Dana Meyer, a spokeswoman for Chicago-based Tribune, declined to comment beyond the company’s statement.
Gannett is urging Tribune shareholders to withhold votes on the company’s slate of board candidates. Gannett CEO Bob Dickey declined to comment in an interview on whether his company would offer its own roster of candidates.
“The next step is for the Tribune board to sit down with us for due diligence and to better understand how these two companies would look together,” Dickey said.
Shares of Tribune jumped 23 percent to $14.09 at 12:07 p.m. in New York and rose to $14.19 earlier, their highest level since August. The $15-a-share bid represents a premium of 99 percent to Tribune’s $7.52 on April 22, the last trading day before the public bid was announced.