Tag

Gannett Co.

Browsing

What: Gannett is walking away from its attempted takeover of Tronc, the publisher of the Los Angeles Times, Chicago Tribune and other major dailies. In a brief statement on Tuesday, the company said that although it had it in discussions with Tribune Publishing, now known as Tronc, it “determined not to pursue an acquisition.” Gannett has not been able to raise funds to finance the deal.
Why it matters: The now cancelled deal would have put together the largest newspaper publisher in the U.S.,with Tronc the third largest newspaper publisher. The newspaper industry is in a consolidation phase due to print advertising revenue declines.

descargaGannett has announced is pulling off its attempt to takeover Tronc, the publisher of the Los Angeles Times, Chicago Tribune and other major dailies as well as Spanish-language newspapers in several markets including Los Angeles, Chicago and San Diego.

Gannett’s target was said to be elusive from the beginning, when it revealed in the spring that it was offering US$388 million for the Chicago company, which it said refused to partake in “constructive discussions.”

Tribune Publishing, as it was known at the time, released an acerbic letter calling Gannett “erratic” and “unreliable,” saying that its executives cancelled meetings without reason and once asked it to make a decision about a proposed buyout within 90 minutes.

descarga-1Tribune Publishing’s Chairman Michael Ferro said in an interview then that Gannett was “trying to steal the company.”Ferro, who owned a stake in cross-town rival Chicago Sun-Times, had himself just become an insider Tribune Publishing after investing US$44.4 million in February.

Tronc Inc. at one point attempted to fend off Gannett by bringing in California entrepreneur Dr. Patrick Soon-Shiong as an investor. He backed chairman Michael Ferro’s plans to shake up the troubled media company with what it called tech-focused initiatives involving artificial intelligence and global expansion in entertainment news and video. The plans were widely criticized.

Tronc maintained that it still had “serious doubts” about Gannett’s ability to finance a potential transaction. The company said it had worked through a purchase price with Gannett in mid-September, but did not disclose what the amount was. Tronc said last week it was told by Gannett that financing hit an unexpected delay.

Both Gannett and Tronc have struggled with sliding ad revenue. Print ad revenues have been falling for years across the industry, and growth in digital ads and online-only subscriptions has not been enough to offset that.

Gannett as Consolidator

Gannett, which recently released 2 percent of its workers, has dealt with those trends by snapping up newspaper companies. This year, the McLean, Virginia company acquired Journal Media Group, the publisher of the Milwaukee Journal Sentinel, Knoxville News Sentinel and other papers, as well as the North Jersey Media Group, which publishes The Record and other papers around that state.

Shares of Gannett Co., publisher of USA Today, rose more than 3 percent in morning trading on Tuesday. Tronc’s stock tumbled more than 19 percent.

“It is unfortunate that Gannett’s lenders made their decision to terminate their role in the transaction without the benefit of Tronc’s third-quarter financials or any future projections,” the company said. “Tronc remained a constructive partner to Gannett as it sought to complete its financing for the agreed-upon purchase price, however, Gannett was unable to do so and terminated discussions.”

What:Gannett Co., Inc. and ReachLocal, Inc. announced a merger agreement whereby Gannett acquires the outstanding shares of ReachLocal, Inc., for US$4.60 per share in cash, via a tender offer.
Why it matters: The acquisition of ReachLocal accelerates Gannett’s digital growth strategy, adding more than US$320 million of annual digital revenue, as well as digital marketing solutions technology.

Gannett Co., Inc. and ReachLocal, Inc. announced a merger agreement whereby Gannett will acquire the outstanding shares of ReachLocal, Inc., for US$4.60 per share in cash, via a tender offer. This represents a 188% premium to the unaffected closing price on Friday, June 24, 2016, and a total enterprise value of approximately US$156 million.

Initially, ReachLocal will expand Gannett’s digital revenue by roughly 50% with its more than 16,000 customers in markets throughout North America, Latin America, Europe and Asia/Pacific. At the conclusion of Gannett’s current digital services arrangement in its existing markets in mid-2017, the combined organization will benefit from leveraging ReachLocal’s best-in-class digital marketing services products in Gannett’s existing 107 local markets in the U.S. ReachLocal brings a diversified client base with home services, healthcare, automotive and professional services representing its largest vertical markets.

Under the terms of the agreement, a subsidiary of Gannett will commence a tender offer for all outstanding shares of ReachLocal for is$4.60 per share in cash, which will remain open for at least 20 business days. The transaction is subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and there being validly tendered and not withdrawn in the tender offer a majority of the outstanding ReachLocal shares. Shortly following the closing of the tender offer, in a second-step merger that will not require stockholder approval, Gannett will acquire all remaining ReachLocal shares.

Sharon Rowlands, ReachLocal chief executive officer said, “We believe that this powerful combination will drive growth and allow us to accelerate innovation, enabling the best and most complete digital marketing solutions in the market today.”

Robert Dickey, Gannett president and chief executive officer said, “The acquisition of ReachLocal accelerates Gannett’s digital growth strategy, adding more than US$320 million of annual digital revenue, the best digital marketing solutions technology in the market, and an outstanding and well-respected management team to Gannett’s digital business. ReachLocal’s focus on local small and medium sized businesses aligns well with Gannett’s local-to-national strategy and extends our reach into new local markets.”

What: Publicly traded media holding company Gannett Co., Inc., the largest newspaper operator in the U.S,   has submitted an unsolicited proposal to acquire Tribune Publishing Co. in a deal valued at around US$815 million.
Why it matters: If the deal goes through, the U.S. newspaper landscape will be farther consolidated. According to Gannett, a combination with Tribune Publishing, would rapidly advance Gannett’s strategy to grow the USA Today network, the largest local to national network of journalists in the country.

gannett_logo_detail Tribune-Publishing-logoTribune Publishing Co. has received an unsolicited proposal, with numerous contingencies, from Gannett Co., Inc. on April 12, 2016 to acquire all outstanding shares of Tribune Publishing for approximately US$388.3 million.

A combination with Tribune would rapidly advance Gannett’s strategy to grow the USA Today network, with distribution in cities including Chicago and Los Angeles.

Gannett Chairman John Jeffry explained that 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.”The consolidation of both newspaper companies would also be aimed at cutting costs at a time of uncertainty for the industry. Gannett said it expected annual synergies of about $50 million.

Based in McLean, Virginia,Gannett is the owner of USA Today and other newspapers. Tribune’s properties include the Los Angeles Times, Chicago Tribune and other newspapers (e.g. Hoy Los Angeles and Hoy Chicago). Since the beginning of 2016, Tribune Publishing has been undertaking a transformation and has made significant organizational changes. The Company, which has a new Board chair, CEO (Justin Dearborn) and CFO, is focused on executing a content-first strategy. This strategy centers on using innovative technology to leverage Tribune Publishing’s valuable content and distribution channels. The Company plans to increase agility and drive innovation while driving efficiencies and reducing costs. Among other recent key initiatives, the Company has added new talent with expertise in technology and key industry verticals to identify and drive customer transactions.

The deal proposed by Gannet, includes about US$390 million of outstanding debt, is worth around US$815 million. On receiving the April 12 proposal, Tribune communicated by telephone to Gannett that the Board of Directors would engage financial and legal advisors to assist it in reviewing the proposal. On April 22, Tribune Publishing’s Board sent a letter to Gannett indicating it was finalizing engagements with Goldman, Sachs & Co. and Lazard as financial advisors and Kirkland & Ellis LLP as legal advisor. The Board is now engaged, with the assistance of its advisors, in a thorough review.

Join us at PORTADA Mexico!