Actionable news
All posts from Actionable news
Actionable news in GCI: GANNETT CO. Inc,

Gannett Proposes to Acquire Tribune Publishing Company for $12.25 Per Share in Cash, Representing a 63% Premium to Current Stock Price

MCLEAN, Va., Apr 25, 2016 (BUSINESS WIRE) -- Gannett Co., Inc. GCI, +1.81% (“Gannett”) today announced a proposal to acquire all of the outstanding shares of common stock of Tribune Publishing Company TPUB, +2.59% (“Tribune”) for $12.25 in cash per Tribune share. The total value of the proposal is approximately $815 million, including the assumption of certain Tribune liabilities, which include approximately $390 million of debt outstanding as of December 31, 2015. Gannett’s all cash proposal would provide Tribune stockholders a 63% premium to the closing stock price of Tribune on April 22, 2016, a 58% premium to the volume weighted average trading price over the past 90 days, and a multiple of 5.6x Tribune’s estimated 2016 EBITDA, based on consensus research estimates. The $12.25 per share offer price also represents a significant premium to the $8.50 share price at which Tribune recently issued common shares and provides immediate and certain cash value to Tribune stockholders.

“The Gannett Board unanimously believes that the acquisition of Tribune would deliver substantial strategic and financial benefits for the combined company, and we are pleased to offer Tribune stockholders a significant and compelling premium and immediate cash value for their investment,” said John Jeffry Louis, Chairman of the Gannett Board of Directors. “A combination with Tribune would rapidly advance Gannett’s strategy to grow the USA TODAY NETWORK, the largest local to national network of journalists in the country, to include more local markets and new platforms, which we believe will benefit readers and result in significant and sustained value creation for Gannett stockholders.”

Robert J. Dickey, president and chief executive officer of Gannett, said, “We believe Tribune shares the new Gannett’s unwavering commitment to journalistic excellence and delivering superior content on all platforms. 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.”

Mr. Dickey continued, “The combined company would also benefit greatly from the combined experience and expertise of Tribune’s talented employees and our own valued team members. The combined organization would offer Tribune employees a broad range of advancement opportunities within a larger organization with the financial strength to meet the industry challenges we all face. We are confident that as an even stronger organization, we would have an enhanced ability to empower our employees to do their best work, and maintain the same high journalistic standards and integrity for which each organization is known.”

Gannett believes that there are compelling strategic and financial benefits for a combination of the two companies, including:

  • Gannett’s $12.25 per share all-cash proposal provides Tribune stockholders a significant premium and immediate and certain value by eliminating the risk associated with Tribune continuing to operate on a standalone basis in an increasingly uncertain time for the industry.
  • The proposed transaction is expected to deliver substantial synergies of approximately $50 million annually, subject to due diligence, that are anticipated to drive compelling near- and long-term growth and value creation at the combined company.
  • As one company, Gannett and Tribune would have the financial stability to continue maintaining journalistic excellence, independence, high standards and integrity for years to come.
  • Gannett can quickly consummate a transaction without any financing condition and has been advised that the proposed combination will not impact the tax-free treatment of Tribune’s recent spin-off transaction.

Below is the text of the letter that was sent on April 25, 2016 to Tribune’s Board of Directors:

April 25, 2016
Mr. Justin C. Dearborn, Chief Executive Officer & Director
Tribune Publishing Company
435 North Michigan Avenue
Chicago, Illinois 60611


Tribune Publishing Company

Dear Mr. Dearborn:

We are disappointed by the response we received from you in your letter of April 22, 2016...