Monday, May 9, 2016

Tribune Adopts Poison Pill To Thwart Gannett Takeover

Tribune Publishing announced on Monday that its board of directors has adopted a limited duration 'Shareholder Rights Plan', commonly referred to as a 'poison pill' in the world of corporate finance, to block an unsolicited bid from Gannett, which owns USA TODAY along with other local daily newspapers. 

“Based on Gannett’s approach and continued hostility, the Board is taking prudent measures to protect our shareholders’ best interests. The Rights Plan ensures shareholders receive fair treatment and protection in connection with any proposal to acquire Tribune Publishing and retain the opportunity to realize the value of their investment in the Company,” said Justin Dearborn, Chief Executive Officer of Tribune. “Our Board is unanimous that Gannett will not succeed with its current tactics and low ball price. Tribune stakeholders deserve better and we are confident that the steps we are taking will create better opportunities for future value than engaging with Gannett under the current circumstances.”

“It is unfortunate that instead of engaging with Gannett to negotiate a mutually agreeable transaction that is in the best interests of all Tribune stockholders," Gannett responded in a statement. "Tribune is putting up another roadblock to prevent its stockholders from realizing compelling, immediate and certain cash value for their investment.”

Last week, Tribune rejected Gannett's all-cash offer of $12.25 per share which translates to $815 million for the publishing company.

"If Tribune’s Board and advisors view Gannett’s $12.25 per share proposal to be undervalued, the Tribune Board should release its analysis to Tribune shareholders to justify its issuance of shares to Michael Ferro at $8.50 per share in February 2016," Gannett responded last week in a statement.

“Tribune’s assets and brands, including the Los Angeles Times and the Chicago Tribune, are worth far more than Gannett’s proposal, which is a non-starter," Chairman Michael Ferro said. "We are focused now on supporting our team as they execute on our plan – we are going to support our outstanding journalists who create world class content – and we are working to create superior value for our shareholders. We recognize that we need to move quickly and we are not going to let this noise from Gannett distract us.”