Gannett makes unsolicited $815M offer for Tribune group

USA Today, Chicago Tribune and other newspapers fill a sales rack at Chicago’s O’Hare International Airport on Monday in Chicago. USA Today publisher Gannett said Monday that it has made an offer to buy Tribune Publishing.
USA Today, Chicago Tribune and other newspapers fill a sales rack at Chicago’s O’Hare International Airport on Monday in Chicago. USA Today publisher Gannett said Monday that it has made an offer to buy Tribune Publishing.

NEW YORK -- Newspaper publisher Gannett has made an $815 million bid for Tribune Publishing in a deal that would give the owner of USA Today control of the Los Angeles Times, Chicago Tribune and several other newspapers.

But Gannett said Monday that Tribune Publishing has refused to start "constructive discussions" about a deal since Gannett offered to buy its rival earlier this month. Tribune confirmed Monday that it received the unsolicited offer and said it "will respond to Gannett as quickly as feasible."

Gannett wants Tribune so that it can expand its USA Today Network, an effort it launched late last year to unite its national brand USA Today with its more than 100 local daily newspapers. The network allows the company to share stories more easily between USA Today and its smaller papers, which include the Detroit Free Press, The Des Moines Register and the Asbury Park Press. Earlier this year, the company remade the logos on all its local newspaper front pages and websites to say that they are "a part of the USA Today Network."

Buying Tribune would give Gannett 11 more daily newspapers, including the Orlando Sentinel, The Baltimore Sun and the Hartford Courant.

Earlier this month, Gannett completed a $280 million deal to buy the Journal Media Group, adding 15 newspapers to its portfolio, including the Knoxville News Sentinel and the Milwaukee Journal Sentinel.

A Gannett takeover of Tribune could mean cost-cutting, shedding jobs and adding USA Today inserts into papers instead of national news sections, said media analyst Ken Doctor.

Gannett, which is based in McLean, Va., said it offered $12.25 in cash for each Tribune share. That's a 63 percent premium to Tribune's Friday closing price of $7.52. Gannett valued the total deal at about $815 million, which includes about $390 million of debt.

The offer comes after a shake-up at Tribune.

Last month, the Chicago-based company announced a reorganization that named each of its newspapers' editors as dual editors-in-chief and publishers. Most media companies keep those roles separate in order to avoid business interests affecting editorial content. In February, Tribune named Justin Dearborn as its new chief executive officer, replacing Jack Griffin less than two years after he joined the business. The changes came months after Tribune received cash infusion of more than $44 million from a firm controlled by Chicago investor Michael Ferro, who is now chairman of Tribune. Gannett said Monday that CEO Robert Dickey talked about a possible deal with both Ferro and Dearborn.

Information for this article was contributed by Mae Anderson and Michelle Chapman of The Associated Press.

Business on 04/26/2016

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