Gannett, Tronc Deal Now In Doubt

Banks financing Gannett Co.’s potential takeover of Tronc Inc. have backed out, according to people familiar with the matter, putting a merger of the newspaper companies in doubt, according to Bloomberg.

Gannett and Tronc had agreed to a deal price of about $18.75 a share, but several lenders withdrew over concerns about the health of the two companies’ businesses at that valuation, said the people, who asked not to be identified because the discussions are private. Talks between Gannett and Tronc continue in the hopes of salvaging their effort to merge, the people said.

Shares of Tronc plunged 28 percent to $12.27 at the close Thursday in New York, their biggest drop in more than two years. Gannett fell 17 percent to $8.21, the most since June 2015.

Gannett, the owner of USA Today, has been trying to buy Tronc for months to create a company with the scale to compete more aggressively with online news sites for national readers and advertisers. A deal would marry Gannett’s portfolio of more than 100 dailies and 1,000 weeklies with Tronc’s Los Angeles Times, Chicago Tribune, San Diego Union-Tribune, Baltimore Sun, Orlando Sentinel and other publications.

Though Gannett is already the largest newspaper publisher in the U.S. by daily circulation, Tronc offers something Gannett lacks: big-city newspaper brands with national reach. After USA Today, Gannett’s most widely circulated paper is the Arizona Republic.