Gannett Rejects Hostile Bid From Hedge Fund-Backed Group
Gannett, the writer of USA Today and greater than 100 different newspapers throughout just about 3 dozen states, rejected a adversarial takeover bid from a hedge fund-backed newspaper crew on Monday, kicking off a combat for shareholder votes to resolve the way forward for the corporate.
In a observation, Gannett’s board mentioned it grew to become down a $1.three billion buyout be offering, or $12 in keeping with proportion, from MNG Enterprises, which is managed by means of the New York hedge fund Alden Global Capital. It concluded that the “proposal undervalues Gannett and is not in the best interests of Gannett and its shareholders” and referred to as it now not “credible.”
The bid, made final month, comes amid a hollowing out of native newspapers around the nation. Broader shifts within the media trade have devastated smaller publications during the last decade, with many last and others decreasing newsroom staffs and the selection of instances every week they’re revealed. Gannett just lately held layoffs and has been continuously decreasing its paintings power since 2015, when its tv stations have been cleaved off right into a separate corporate.
If MNG have been to buy Gannett, it will create the biggest newspaper writer within the country, including Gannett’s lineup to a solid of 200 papers that come with The Denver Post and The San Jose Mercury News. But media watchers have anxious how any such merger may have an effect on the already weakened native media panorama. Critics have derided Alden as a “destroyer of newspapers,” vulnerable to “savage” layoffs and “probably the most maximum ruthless of the company strip miners reputedly intent on destroying native journalism.”
MNG, which owns roughly 7 p.c of Gannett’s inventory, mentioned the writer’s rejection confirmed a overlook for its shareholders. “The sad reality for Gannett shareholders is the company has no credible plan to attain a $12 per share valuation on its own,” MNG mentioned in a observation.
That more or less tit-for-tat sniping isn’t odd in shareholder battles, and the struggle for the way forward for Gannett may result in a standoff over board nominees. MNG mentioned it will now imagine placing forth its personal administrators, who would vote for the be offering if elected. Gannett most often holds elections within the spring.
Gannett, which additionally owns newspapers like The Detroit Free Press and The Tennessean in Nashville, has driven a plan to turn into its papers into virtual shops. It has spent over $300 million obtaining web advertising applied sciences and products and services, together with ReachLocal and WordStream. MNG has been vital of that technique and has requested Gannett to instantly evaluation choices and to decide to a freeze on further acquisitions of virtual companies.
The Alden-controlled writer referred to as Gannett’s virtual technique “pie in the sky,” including that its “issues are higher fastened by means of skilled operators akin to MNG, clear of pressures of the general public markets.”
In a letter dated Jan. 16, the chairman of Gannett’s board, J. Jeffry Louis, requested MNG a chain of questions, akin to the way it deliberate to finance its bid and the way it deliberate to handle attainable antitrust scrutiny. Mr. Louis invited MNG’s leaders to talk about the problems, however then puzzled the corporate’s motives when MNG required all events to signal a nondisclosure settlement prior to any assembly.
The Alden-controlled corporate disputed that characterization, and mentioned “there are no impediments — aside from the Gannett Board — to MNG completing the proposed transaction and for Gannett shareholders to achieve real value.”
MNG’s bid of $12 a proportion is a 23 p.c top class to the place Gannett have been buying and selling prior to the be offering. Following Gannett’s rejection Monday, stocks within the corporate have been down three p.c to $10.88, after last at $11.22 on Friday.