Gannett Is No Longer Trying To Acquire Tronc
By Stephen Gossett in News on Nov 1, 2016 2:46PM
Tribune Tower (Photo credit: Chris Wilson)
After half a year of will-they-won’t-they?, the Gannett Company made it official: they are not joining the Tronc club. The publishing company announced on Tuesday it will no longer continue attempts to acquire the Chicago-based publishing company better remembered as Tribune Publishing. It owns the Los Angeles Times and the Chicago Tribune, among many other newspapers.
Gannett said in a statement that the two sides could not agree to terms that Gannett found favorable:
"While we have great respect for the tronc employees and properties, and while we believed that the acquisition would have provided an attractive opportunity to expand the USA Today Network quickly, in the end the terms were not acceptable. That said, we remain fully committed to our strategy of expanding our local footprint and building the country’s largest digital news network under the USA Today Network banner.”
Tronc said they were notified this morning “that Gannett has decided to abruptly terminate discussions.” A deal previously appeared to be forthcoming. Tronc said in a statement that the two sides had agreed on a price last month, but Gannett’s financing fell through:
“ the Tronc Board, management team and their advisors engaged in substantive discussions and due diligence with Gannett regarding a potential transaction, with an unwavering focus on creating value for tronc shareholders. The parties agreed to a purchase price in mid-September and subsequently worked to finalize a Merger Agreement. Last week, Gannett informed Tronc that its financing encountered an unexpected delay. 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. 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.”
Tronc executive chairman Michael Ferro urged the company to reject two previous Gannett, “$12.25 and $15 a share, respectively,” according to Politco.
Ferrro refashioned Tribune Publishing in June to the eminently mock-able Tronc (dystopia-speak for “Tribune online content) to presumably more align the brand with his grand sci-fi vision of staffs comprised of autonomous news-generator bots.
As the New York Times notes, Ferro likely faces a difficult time justifying the move to investors. “Tronc shares plunged nearly 20 percent on Tuesday morning on the news. Gannett shares were up 1.3 percent in early morning trading,” the Times reported.
Last week, Gannett slashed its workforce by two percent, according to the USA Today, keeping with a recent pattern of cutting local newsrooms and digital consolidation.