MONDAY: Owner of *USA Today and 100 other media properties nationwide, Gannett Co., set forth its one of another expansion moves when it announced an acquisition of Tribune Publishing worth $815 million.
(*It is nationwide news organization that taps brings in a complete package by its 3,800 journalists to report on major national as well as local issues, focusing greatly on investigative journalism and opting a watchdog policy while reporting)
As per **deal guidelines, Gannett CEO, Robert Dickey offered to pay $12.25/share – i.e. a 63% premium to Tribune’s ***CLOSING stock, the last Friday – in his letter to Tribune CEO, Justin Dearborn.
However,in an email to Tribune Publishing employees on morning, Dearborn said the company did not seek or encourage Gannett’s proposal and has not been trying to sell (source: Los Angeles Times).
(**deal incorporates an assumed amount worth $390 million of Tribune’s debt outstanding as of 31 Dec 2015) (***FRIDAY: Tribune shares CLOSED at $7.52 -bullish by 2.6%. MONDAY: During PREMARKET TRADING,its shares surged by 54% to $11.56)
As per detailed overview, this offer price is 5.6 x Tribune’s estimated 2016 earnings before interest, taxes or (EBITDA). Gannett estimates nearly $50 million/annual scale in ‘synergies’ savings.
“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.” – Gannett CEO, Robert Dickey
With this deal accomplishment, Gannett would expand its network ties as per strategic markets giving it anownership of dominant newspapers in major metro areas, i.e. Chicago Tribune, the LA Times, the Baltimore Sun, Hartford Courant, and the Orlando Sentinel.
Upon this, Robert further stated that Tribune “fills a number of geographical gaps” for them:
“We think bringing their publications to the USA TODAY NETWORK strengthens the overall NETWORK.”
INSIGHT: Gannett spun off from its former parent in June of last year, retaining the publishing business but not its broadcast assets. It now holds authority 107 local news organization like Detroit Free Press, Des Moines Register, Arizona Republic, Cincinnati Enquirer and Milwaukee Journal Sentinel (source: USA Today).
“With a focused strategy, unmatched collection of award-winning content and brands, and the right leadership team in place, Tribune Publishing is well-positioned to create value for shareholders. The board is now engaged, with the assistance of its advisors, in a thorough review. The board is committed to acting in the best interests of shareholders and will respond to Gannett as quickly as feasible.” – Tribune Publishing