Monday, May 23, 2016

Report: Tribune Rejects Latest Gannett Offer

(Reuters) -- Tribune Publishing Co, the owner of the Los Angeles Times and the Chicago Tribune, rejected Gannett Co Inc's latest takeover offer but said it would allow Gannett to access some confidential corporate information.

Tribune also said on Monday that Nant Capital LLC would invest $70.5 million in the company for a stake of about 12.9 percent, becoming its second largest shareholder.

Nant Capital founder Patrick Soon-Shiong will join Tribune's board as vice chairman, effective June 2.

Reuters reported on Sunday that Tribune was planning to reject Gannett's offer, valued at $864 million including debt.

Tribune said the $15 per share cash offer by the publisher of USA Today was not in the best interests of shareholders.

Oaktree Capital Management LP, a major shareholder of Tribune, urged the company to form an independent board to consider Gannett's proposal, according to a filing.

Gannett's pursuit of Tribune has come at a challenging time for the newspaper industry, which is grappling with high costs, shrinking advertising dollars and a broad move toward digital content. Gannett is betting that bigger scale will bring it savings and help it generate more profit.

With Tribune Publishing now an acquisition target, it remains to be seen whether other companies in the sector, such as New Media Investment Group Inc, News Corp and McClatchy Co, will show an interest.

Last month, Gannett made an unsolicited takeover offer for Tribune at $12.25 per share in cash, in a deal worth roughly $815 million. It followed up this month with a $15 per share offer for Tribune.

Oaktree Capital Group LLC, the second largest shareholder in Tribune Publishing, has urged the Chicago-based company to explore a sale and sent a letter to Tribune's board last week.

Proxy adviser Institutional Shareholder Services Inc recommended that Tribune shareholders vote for the nominated directors.

The second largest U.S. newspaper chain by circulation, Digital First Media, publisher of the Denver Post and San Jose Mercury News, explored a sale last year before negotiations fell apart with buyout firm Apollo Global Management LLC.

Billionaire Mort Zuckerman also tried to sell The New York Daily News last year, but then scrapped the plan after bids for the newspaper came in too low.

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