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Why is Tribune Publishing (TPUB) Down Over 15% Today?
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Tribune Publishing Co. today announced that its Board of Directors has evaluated and rejected the revised proposal by Gannett Co., Inc. (GCI - Free Report) to acquire all of Tribune Publishing for $15.00 per share in cash. Tribune Publishing cited that the Gannett proposal was not in the best interests of Tribune shareholders.
“The Gannett $15.00 per share proposal for all of Tribune is clearly inadequate as a control investment in Tribune and, as ISS has pointed out, our Board ‘has grounds to decline to engage’ on Gannett’s proposal,” said Tribune Publishing CEO Justin Dearborn in a company statement. “We continue to have serious doubts about Gannett’s ability to enter into a transaction – especially when you consider its approximate $650 million pension and OPEB liability - that makes sense for Tribune and its stakeholders.”
Two other notable reasons the owners of the Chicago Tribune and Los Angeles Times cited are Tribune Publishing is insisting that its turnaround plan is better than Gannett’s bid and has a billionaire entrepreneur taking a $70 million stake in the company.
“We remain unrelenting in our pursuit of value whether on a standalone basis or through a transaction, and believe the $70.5 million growth capital investment announced today from Nant Capital – making Nant Tribune’s second largest shareholder – will support Tribune’s transformation strategy,” Mr. Dearborn said. “Regardless of the outcome of the discussions with Gannett, we are confident that we have the right strategic plan in place to leverage technology and effectively monetize our world class content.”
Nant Capital LLC, which was founded by health-care investor Dr. Patrick Soon-Shiong, is to exchange its capital for 4.7 million shares of Tribune stock at $15 a share—the same price that Gannett had proposed in its raised bid. Following the transaction, Nant Capital will own about 12.9% of Tribune Publishing’s shares outstanding, making it Tribune’s second-largest shareholder.
Gannett may abandon its bid to acquire Tribune if not enough Tribune shareholders indicate support for a tie-up, saying it would wait to decide whether to keep up its pursuit until after Tribune’s June 2 annual shareholder meeting, per a report from the Wall Street Journal. Moreover, Gannett has urged Tribune shareholders to withhold votes for Tribune’s eight directors to show support for a deal.
Shares of TPUB were down over 15% throughout morning and earlier afternoon trading, while shares of GCI were only down marginally, just over 1%, during earlier afternoon trading. Both Tribune Publishing and the Gannett Co. have a Zacks Rank #3 (Hold).
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Why is Tribune Publishing (TPUB) Down Over 15% Today?
Tribune Publishing Co. today announced that its Board of Directors has evaluated and rejected the revised proposal by Gannett Co., Inc. (GCI - Free Report) to acquire all of Tribune Publishing for $15.00 per share in cash. Tribune Publishing cited that the Gannett proposal was not in the best interests of Tribune shareholders.
“The Gannett $15.00 per share proposal for all of Tribune is clearly inadequate as a control investment in Tribune and, as ISS has pointed out, our Board ‘has grounds to decline to engage’ on Gannett’s proposal,” said Tribune Publishing CEO Justin Dearborn in a company statement. “We continue to have serious doubts about Gannett’s ability to enter into a transaction – especially when you consider its approximate $650 million pension and OPEB liability - that makes sense for Tribune and its stakeholders.”
Two other notable reasons the owners of the Chicago Tribune and Los Angeles Times cited are Tribune Publishing is insisting that its turnaround plan is better than Gannett’s bid and has a billionaire entrepreneur taking a $70 million stake in the company.
“We remain unrelenting in our pursuit of value whether on a standalone basis or through a transaction, and believe the $70.5 million growth capital investment announced today from Nant Capital – making Nant Tribune’s second largest shareholder – will support Tribune’s transformation strategy,” Mr. Dearborn said. “Regardless of the outcome of the discussions with Gannett, we are confident that we have the right strategic plan in place to leverage technology and effectively monetize our world class content.”
Nant Capital LLC, which was founded by health-care investor Dr. Patrick Soon-Shiong, is to exchange its capital for 4.7 million shares of Tribune stock at $15 a share—the same price that Gannett had proposed in its raised bid. Following the transaction, Nant Capital will own about 12.9% of Tribune Publishing’s shares outstanding, making it Tribune’s second-largest shareholder.
Gannett may abandon its bid to acquire Tribune if not enough Tribune shareholders indicate support for a tie-up, saying it would wait to decide whether to keep up its pursuit until after Tribune’s June 2 annual shareholder meeting, per a report from the Wall Street Journal. Moreover, Gannett has urged Tribune shareholders to withhold votes for Tribune’s eight directors to show support for a deal.
Shares of TPUB were down over 15% throughout morning and earlier afternoon trading, while shares of GCI were only down marginally, just over 1%, during earlier afternoon trading. Both Tribune Publishing and the Gannett Co. have a Zacks Rank #3 (Hold).
TRIBUNE PUBLSHG Price and Consensus
TRIBUNE PUBLSHG Price and Consensus | TRIBUNE PUBLSHG Quote
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