File photo of LA Times building.
Newspaper company Gannett is raising the pressure on Tribune Publishing management to agree to a sale by upping its offer to $15 a share. The previous offer was $12.25 a share. The offer includes taking over the debt of the foundering TPub, which owns the Los Angeles Times and other papers, making the offer worth about $864 million. Tribune's boss Michael Ferro has said the company he recently joined is not for sale, and the board adopted a poison pill strategy that would destroy itself from within should a hostile takeover occur.
"Gannett, with the assistance of its outside advisors, is ready to immediately engage with Tribune on an expedited basis," Robert Dickey, president and chief executive officer of Gannett, said in a news release.
"Our increased, all-cash offer provides Tribune shareholders with a significant premium of 99% and immediate, certain value. By not engaging constructively with Gannett," Dickey said, "we believe Tribune is jeopardizing its shareholders' investment and disregarding their best interests."
The increased offer reflects additional analysis of Tribune financial statements filed earlier this month, and Gannett's "greater confidence in its ability to yield addition operating improvements" in the transaction, the company said. Gannett previously said it would save $50 million annually through the Tribune Publishing acquisition.
Tribune's second-largest shareholder, the LA investment firm Oaktree Capital Management, had said even before the revised offer that it wants Ferro and his board to consider the bid. If nothing else, Tribune publishing's stock is up now that there is someone interested in paying a lot for it. Today's price was $14.10 in pre-trading.
* Added: Ken Doctor weighs in and says he has been told that Gannett is willing to go to an even higher third offer. Also this: "The end of one newspaper era is clearly ending. With print ad revenue in a death spiral, consolidation — deeper and wider cost-cutting is happening, usually quietly, across the country. Consolidation — rounding fewer wagons around smaller cash flows — is the name of the game."