(Reuters) - Oaktree Capital Group LLC OAK.N, the second largest shareholder in Tribune Publishing Co TPUB.N, wants the U.S. newspaper company to explore a sale, people familiar with the matter said on Monday.
Oaktree’s support for a sale of Tribune, the owner of the Chicago Tribune, Los Angeles Times and Orlando Sentinel, could help Gannett Co Inc’s GCI.N campaign to buy the company. Last month, Gannett made an unsolicited takeover offer for Tribune at $12.25 per share in cash, in a deal worth roughly $815 million.
The proposed deal came at a challenging time for the newspaper industry, which is grappling with high costs, shrinking advertising dollars and a broad move toward digital content.
While Oaktree is not in favor of selling Tribune for $815 million, the Los Angeles-based investment firm wants the company to actively engage with Gannett and other potential buyers to seek a higher price, the people said.
The sources asked not to be identified because Oaktree has not made its views public. Oaktree, Tribune and Gannett declined to comment.
Oaktree, which owns 14.82 percent of Tribune, is the largest shareholder besides Merrick Media LLC, the investment firm that controls the company and is led by Tribune chairman Michael Ferro. Merrick owns roughly 16 percent of the company.
Gannett has been frustrated with Tribune’s lack of engagement and urgency to pursue a deal. Tribune has hired advisers and said it is responding as quickly as it can to Gannett’s overtures. On Monday, Gannett urged Tribune shareholders to withhold their votes for board nominees during Tribune’s annual meeting June 2.
Gannett Chief Executive Robert Dickey said in a statement on Monday that Tribune stockholders, by withholding their votes, would send a “clear message” to Tribune’s board that it should engage in talks with the company.
Tribune responded with a statement that said Gannett has no path to control the company, and that “their tactics clearly demonstrate a desperate and opportunistic attempt to steal the company.”
Tribune Publishing shares fell 1 percent Monday to $11.21 per share while Gannett shares were trading down 0.2 percent at $16.80 per share. Tribune’s quarterly earnings call is scheduled for Wednesday.
Reporting by Liana B. Baker in San Francisco and Greg Roumeliotis in New York; Editing by Richard Chang and Andrew Hay