Gannett Raises Bid for Tribune Publishing

Gannett Co. said Monday that it raised its all-cash offer for Tribune Publishing Co. to about $475 million, just two weeks after Tribune's board rejected a lower bid.

Gannett raised its offer to $15 a share, a proposal valued at about $475 million when excluding about $385 million of outstanding debt.

The revised offer represents a 22% increase over its prior bid and a nearly 100% premium over Tribune Publishing's share price of $7.52 on April 22, the last trading day before Gannett made public its initial offer of $12.25 a share April 25. Gannett's first proposal was valued at about $400 million plus the assumption of debt.

"Our increased offer demonstrates our commitment to engaging in serious and meaningful negotiations with the Tribune Board to reach a mutually agreeable transaction where Gannett acquires all of Tribune," Gannett Chairman John Jeffry Louis said. "It is evident from our discussions with Tribune shareholders that there is overwhelming support for the companies to engage immediately."

A representative from Tribune Publishing wasn't immediately available for comment. The company has said the initial bid undervalued the company.

Tribune and Gannett have sent increasingly terse public letters back and forth since Gannett first went public with its offer. Tribune has accused Gannett of "playing games" and calling its approach "aggressive and hostile." Gannett has urged Tribune's shareholders not to back Tribune's slate of board nominees at the annual meeting June 2 to send a message to the company to engage in talks.

Last week, Tribune approved a so-called poison pill as part of its defense to try to stop Gannett from acquiring the publisher of the Los Angeles Times and other newspapers. Gannett owns USA Today and 107 other U.S. dailies. Shareholder rights plans, or poison pills, are designed to dilute the value of a stock by flooding the market with additional shares if certain conditions are met, making it expensive for an investor to acquire a controlling stake.

Shares of Tribune Publishing rose 22% to $14 in premarket trading.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

May 16, 2016 08:35 ET (12:35 GMT)

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