Gannett offered to buy Tribune Publishing, the owner of the Los Angeles Times and Chicago Tribune, on Monday in a deal that could reach $815 million and could transform the publishing business during a period of industry decline.
Gannett, the owner of USA Today, offered Tribune $12.25 a share in cash, a 63 percent premium to its stock closing price Friday. It would also assume some Tribune debt, bringing the potential deal value to $815 million. Tribune said in a statement that it is reviewing Gannett’s offer.
“The board is committed to acting in the best interests of shareholders and will respond to Gannett as quickly as feasible,” Tribune said.
Gannett is “disappointed” by Tribune’s response and the company’s “continued refusal to begin constructive discussions with us,” Gannett President Robert Dickey, said in a letter to Tribune CEO Justin Dearborn.
The tone of the letter suggests that cementing a deal between the two media giants could be difficult. It comes at a difficult time in publishing as readers continue to move online, where the digital-advertising model has been slow to make up for steep losses in print advertising.
If Tribune accepts Gannett’s offer, it would put some of the country’s most recognizable news media properties under a single owner. In addition to USA Today, Gannett owns the Detroit Free Press and the Des Moines Register. In addition to the Los Angeles Times and Chicago Tribune, the Tribune owns the Baltimore Sun and Orlando Sentinel.
The deal would allow Gannett, which already has a large national footprint, to venture into new markets and give a boost to regional newspapers, said Tony Scherrer, director of research of Smead Capital Management, which owns a 5 percent stake in Gannett.
But the potential merger might face government resistance. It comes just a month after the Justice Department sued to block Tribune from buying two California newspapers.