In the latest sign the newspaper industry’s only hope for a future is intense consolidation, Gannett Co. on Monday said it has made a all-cash bid to acquire Tribune Publishing Co., owner of the Los Angeles Times, for $815 million, or $12.25 a share. The deal, approved unanimously by the Gannett Board, would include approximately $390 million in outstanding debt.
Gannett said the deal would give current Tribune shareholders a 63 percent premium to the company’s closing share price as of Friday. Gannett, headquartered in Tysons Corner, Virginia, owns more than a dozen major newspapers, including USA Today, the Des Moines Register and the Indianapolis Star. Tribune owns 11 daily newspapers, including the Los Angeles Times and the Chicago Tribune. Both newspaper companies were recently spun out of larger media conglomerates. Gannett said the deal would deliver “substantial synergies” of approximately $50 million a year.
“We believe Tribune shares the new Gannett’s unwavering commitment to journalistic excellence and delivering superior content on all platforms,” Robert J. Dickey, Gannett’s president and CEO, said in a statement. “In this respect, the proposed combination of Gannett and Tribune would bring together two highly complementary organizations with a shared goal of providing trusted, premium content for the readers and communities we serve. We are confident that a combined Gannett and Tribune would add value for stakeholders of both companies as we work together to foster deep and vital connections among the members of our communities, provide excellent solutions for our business partners and drive value for our stockholders.”
The offer is the latest in an operatic saga for the country’s largest newspaper publishers. Tribune Publishing this year attempted to acquire Freedom Communications, owner of the Orange County Register. But it abandoned that bid in March after the U.S. Department of Justice filed a lawsuit to block the deal, citing antitrust concerns. After that deal fell through, Digital First Media, which owns the Los Angeles Daily News, swept in and acquired Freedom.
Monday’s announcement is a public repeat of a private offer made April 12 and again during several phone conversations, according to Dickey. In a letter to Tribune’s board Monday, Dickey said Gannett was disappointed by Tribune’s “continued refusal to begin constructive discussions with us.”
In a response issued Monday, Tribune called Gannett’s bid “unsolicited” but said the company’s board was engaged in a “thorough review” of the proposal with help from a team of legal and financial advisers. “The board is committed to acting in the best interests of shareholders and will respond to Gannett as quickly as feasible,” the company said.