(Reuters) - Tribune Publishing Co is reviewing an unsolicited and possibly unwelcome $815 million takeover bid from Gannett Co Inc, a move by Gannett to gain scale as the newspaper industry continues to consolidate.
Gannett, publisher of USA Today, announced on Monday that it had offered to pay $12.25 in cash per share of Tribune, a 63 percent premium to its closing price on Friday.
It made the offer nearly two weeks ago, but Tribune has not yet responded. That has frustrated Gannett’s management and spurred the company to publicize its offer, Gannett Chief Executive Bob Dickey said in an interview.
Dickey said he wants to sit down with Tribune’s board and iron out a deal.
“We need to sit down with them and discuss the offer that is in front of them,” he said. “I‘m confident if we cooperate together we can find a way to make an agreement that works for both parties.”
Tribune said on Monday that it would respond as quickly as possible after Gannett said that its target has refused “to engage in a dialogue.”
The proposed deal comes at a difficult time for newspaper publishers, which are grappling with high costs, shrinking advertising dollars and a broad move toward digital content.
Gannett has been on a mission to buy up rivals to create a larger, more efficient company by expanding its footprint into more cities and expanding its scale.
It is fresh off buying Journal Media Group and is now looking to enter more cities, Dickey said. Tribune owns the Los Angeles Times and Chicago Tribune newspapers, as well as metro dailies like the Orlando Sentinel.
Gannett first notified Tribune of its interest in a letter on April 12. Six days later, it sent a new letter to Tribune asking for a response.
On April 22, Tribune responded that it had hired Goldman Sachs Group Inc and Lazard Ltd to review the proposal. Gannett is being advised by former Lazard banker John Chachas’ firm, Methuselah Advisors.
Peter Lewis of Towle & Co, the seventh-largest shareholder in Tribune, said Gannett’s offer price was well below the investment firm’s sell target, which was in the “high teens.” A year ago, Tribune shares were trading closer to $19 per share.
Reporting by Liana B. Baker in New York and Sai Sachin R. Additional reporting by Supantha Mukherjee in Bengaluru; Editing by Lauren Tara LaCapra and Cynthia Osterman