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Gannett’s Takeover Offer Rejected by Tribune as it gets $70.5 Million Investment


05/24/2016


Gannett’s Takeover Offer Rejected by Tribune as it gets $70.5 Million Investment
With an investment that made Los Angeles billionaire Patrick Soon-Shiong the second largest shareholder of Tribune Publishing Co, the owner of the Los Angeles Times and the Chicago Tribune, the billionaire reportedly has invested $70.5 million in the company, said the publishing house recently.
 
The $15 per share offer for the latest takeover bid of Tribune by Gannett Co Inc was rejected by the Tribune very recently. However Tribune clarified that access to some confidential corporate information would be allowed to Gannett, the publisher of USA Today by Tribune. The issue had come out in the media just a few days ago.
 
The news resulted in a fall of 5 percent in the shares of Tribune.
 
Soon-Shiong is all set to join the publisher's board as vice chairman on June 2 and will also hold about 12.9 percent in Tribune through his fund Nant Capital LLC.
 
Soon-Shiong is the founder of two drug companies – both of which he sold for a total of $8.6 billion, is a South African-born surgeon and is part-owner of the Los Angeles Lakers basketball team.
 
A standstill agreement with Tribune that essentially limits its ability to raise its stake in the publisher was entered upon by Nant Capital.
 
Soon-Shiong is one of the highest paid chief executives in America and is also chairman and chief executive of biotech company NantKWest Inc. He took NantKWest public last June.
 
Gannett was invited by Tribune to agree to a "mutual non-disclosure agreement" to share information about a potential deal even though the later has already rejected Gannett's latest takeover offer. The agreement has become a bone of contention for both the companies and neither of the companies have yet signed the agreement.
 
The proposed non-disclosure agreement "would require Gannett to effectively cease any public proxy solicitation or other public pursuit of a transaction," Gannett had first said in a statement about the non disclosure agreement.
 
The agreement it offered does not prevent Gannett from continuing to pursue its withhold campaign or other proxy contests, the Tribune had said in response to Gannett’s concerns.
 
The proposed agreement does restrict public disclosures that could inhibit a proxy fight even though it does not have a restriction against a proxy contest, Gannett had responded to the Tribune and said. Gannett said that it was essentially being asked not to include references to discussions or negotiations in proxy statements or tender offer documents by the Tribune while referring to the agreement implications.  
 
Last week, in an appeal to the shareholders of tribune, support for the Tribune Publishing’s eight nominees to the board of directors at its annual meeting June 2 was urged to be withdrawn by Gannett.  
 Tribune shareholders vote for the nominated directors. Proxy adviser Institutional Shareholder Services Inc had recommended.
 
Gannett was urged to form an independent board to consider the proposal of the agreement by Oaktree Capital Management LP, a major shareholder of Tribune which is also pushing for a deal with Gannett.
 
(Source:www.reuters.com)