The simmering war for ownership of the parent company of Los Angeles Times heated up on Monday.
Gannett Co., whose offer to buy Tribune Publishing has been rebuffed, said it will lobby Tribune’s shareholders to withhold votes next month for Tribune’s directors as a show of disapproval. Meanwhile, Reuters reported that Tribune’s second-biggest shareholder wants Tribune to explore a sale.
Reuters, citing unnamed sources, said that Oaktree Capital Group does not favor selling Tribune for the $815 million Gannett has offered, but it does want Tribune to actively engage with Gannett and other potential buyers to seek a higher price. Up to now Oaktree has been silent, as least publicly, throughout the long months of Tribune’s travails.
Oaktree, based in downtown Los Angeles, owns a little less than 15 percent of Tribune. The largest shareholder is Tribune Chairman Michael Ferro’s Merrick Media, which holds 16 percent. Ferro does not want to sell.
Meanwhile, Gannett said it “intends to solicit ‘withhold’ votes in connection with the election of all eight nominees to the Tribune board of directors as a referendum that the Tribune board should substantively engage immediately with Gannett regarding Gannett’s proposal to acquire Tribune for $12.25 per share in cash.” The board election is scheduled for June 2.
Gannett is not putting up an alternative slate of directors but wants to put pressure on Tribune’s directors to negotiate. The stock had been trading for about $8 before the offer.
In a statement Monday, Tribune said “Gannett has no path to control for Tribune Publishing and their tactics clearly demonstrate a desperate and opportunistic attempt to steal the company.”
Gannett, which owns USA Today and more than 100 local news properties, a week ago revealed its offer for Tribune, which owns the L.A. Times, Chicago Tribune and nine other dailies.
The overture is important for at least a couple of reasons. For one, Gannett is a big newspaper company that makes serious offers and often prevails. Another is that, in the industry, Gannett is known for running bare-bones local newspapers while putting greater resources into USA Today, its national paper.